1988
DOI: 10.1111/j.1574-0862.1988.tb00054.x
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Collateral, Guaranties and Rural Credit in Developing Countries: Evidence from Asia

Abstract: The paper reviews the theory of the impact of loan collateral, and in particular land collateral, in institutional and non‐institutional rural credit markets. Evidence from three Asian developing countries is presented, showing extensive use of land collateral among institutional lenders in countries where such collateral is legal. The use of land collateral is more common than other forms of security, except in places where legal inhibitions on mortgaging agricultural land exist. Non‐institutional lenders are… Show more

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Cited by 35 publications
(34 citation statements)
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“…A large literature in development economics examines the potential for microfinance to expand access to credit, often through joint liability lending (Morduch, 1999;Hermes and Lensink, 2007). We find very large effects of asset collateralization on credit uptake consistent with Feder et al (1988).…”
Section: Introductionmentioning
confidence: 54%
“…A large literature in development economics examines the potential for microfinance to expand access to credit, often through joint liability lending (Morduch, 1999;Hermes and Lensink, 2007). We find very large effects of asset collateralization on credit uptake consistent with Feder et al (1988).…”
Section: Introductionmentioning
confidence: 54%
“…Besides provision of tenure security, another argument frequently put forward in support of tenure legalization is that the absence of formal ownership impedes access to credit and loans (Feder et al. , 1988; De Soto, 1989; 2000; World Bank, 1993; 2003; Feder and Nishio, 1998).…”
Section: Access To Creditmentioning
confidence: 99%
“…Collateral can solve these adverse selection and moral hazard problems in the credit market (Stigliz and Weiss, 1981), and some scholars have mainly focused on how it can improve farmers' formal credit availability (Feder et al, 1988). But Chinese farmers generally lack effective collateral, which weakens the role that it can play in the rural formal credit market.…”
Section: Availabilitymentioning
confidence: 99%