The ex ante theory of collateral states that better informed lenders, such as informal lenders, rely less on collateral …. We test this by contrasting the use of collateral between formal and informal lenders in the same market. Indeed, formal … lenders rely more often on collateral, controlling for conventional determinants of collateral. Moreover, better information …

We offer a new test of the ex ante theory of collateral. Theory states that lenders rely less on collateral if they … have better information about borrowers. We test this by contrasting the use of collateral between formal and – better … informed – informal lenders in a developing financial market. Indeed, formal lenders rely about 40% more often on collateral …

start-ups caused by lacking collateral or equity and high information asymmetry. The present study quantifies the economic …

on the economic growth in this region. -- financing of small and medium-sized enterprises ; credit rationing ; collateral …

Due to opaque information and weak enforcement in emerging loan markets, the need for collateral is high, whereas … borrowers lack adequate assets to pledge as collateral. How is this puzzle solved? We find for a representative sample from … Northeast Thailand that indeed most loans do not include any tangible assets as collateral. Instead, lenders enforce collateral …