Unlocking Dead Capital

Unlocking Dead Capital

Collateral can increase access to finance, especially for small firms, and lead to better terms for loan contracts. Many argue that firms are excluded from formal credit markets because they lack assets that can serve as collateral. In fact, firms...

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Bibliographic Details
Main Authors: Safavian, Mehnaz, Fleisig, Heywood, Steinbuks, Jevgenijs
Format: Viewpoint
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
ASSETS
BANKS
COLLATERAL
CREDIT MARKETS
ECONOMIC GROWTH
ECONOMICS
EMPLOYMENT
FINANCIAL LEASING
FINANCIAL SECTOR
INTEREST RATE
INTEREST RATES
INVENTORY
INVESTMENT CLIMATE
LAWS
LEASEHOLDS
LEGAL FRAMEWORK
MARKET VALUE
MICROFINANCE
MOVABLE PROPERTY
PUBLIC POLICY
PUBLIC POLICY INNOVATIONS
REAL ESTATE
RISK PREMIUM
SECURED CREDITOR
SECURED CREDITORS
UNSECURED LOANS
Online Access:http://documents.worldbank.org/curated/en/2006/03/6777996/unlocking-dead-capital
http://hdl.handle.net/10986/11190
Description
Summary:Collateral can increase access to finance, especially for small firms, and lead to better terms for loan contracts. Many argue that firms are excluded from formal credit markets because they lack assets that can serve as collateral. In fact, firms generally have a wide array of productive assets that could secure a loan-but the legal framework prevents this. Reforming collateral laws can unlock dead capital, as seen in Albania and Romania.

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