Publication: The Impact of Information Sharing on the Use of Collateral versus Guarantees
De Haas, Ralph
This study exploits contract-level data from Bosnia and Herzegovina to assess the impact of a new credit registry on the use of borrower collateral versus third-party guarantees. Among first-time borrowers, the introduction of mandatory information sharing leads to a shift from collateral to guarantees, in particular for riskier borrowers. Among repeat borrowers, both collateral and guarantee requirements decline in proportion to the length of the lending relationship. These results suggest that information sharing can both reduce adverse selection among new borrowers and hold-up problems among repeat borrowers.
“De Haas, Ralph; Millone, Matteo. 2020. The Impact of Information Sharing on the Use of Collateral versus Guarantees. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/36118 License: CC BY-NC-ND 3.0 IGO.”