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Doing Business measures 2 types of institu- of collateral and the ability to enforce claims allowed? Do secured creditors have prior- tions and systems that can facilitate access in the event of default. ity rights to the collateral in a to finance and improve its allocation: credit procedure? The 2 types of institutions are measured by information registries or bureaus and the le- 2 sets of indicators. The first set of indicators The second set of indicators looks at the gal rights of borrowers and lenders in secured analyzes the legal framework for secured coverage, scope and quality of credit infor- transactions and bankruptcy laws (figure 1). transactions by looking at how well collateral mation available through public credit regis- These institutions and systems work best and bankruptcy laws facilitate lending. For tries and private credit bureaus. For example, together. Information sharing helps credi- example, does the law allow companies to do retailers or utility companies as well as tors assess the creditworthiness of clients use future crops as collateral? Does the col- financial institutions share credit information (though it is not the only risk assessment lateral need to be described in detail in the with public or private registries? Are data tool), while legal rights can facilitate the use agreement, or is a general description on both firms and individuals distributed in credit reports? FIGURE 1 Do lenders have credit information on entrepreneurs seeking credit? Is the law Rankings on the ease of getting credit are favorable to borrowers and lenders using movable assets as collateral? based on the sum of the strength of legal rights index and the depth of credit informa- Credit inform ation tion index (table 1).

Potential Can movable assets be borrower used as collateral? LEGAL RIGHTS

Movable Collateral Credit registries and In recent years access to finance has been Lender asset registry credit bureaus considered one of the main obstacles to

What types can be Can lenders access business in Africa, particularly for small and used as collateral? credit information medium-size enterprises.1 The Organization on borrowers? for the Harmonization of Business Law in Africa (OHADA) is doing something about it. After 3 years of debate and consultation with TABLE 1 Where are legal rights and credit information systems strong—and where not? numerous agencies—including Juriscope, Strongest RANK Weakest RANK the World Bank Group, the Fondation Malaysiaa 1 Congo, Dem. Rep. 174 pour le Droit Continental and the United United Kingdoma 2 Iraq 175 Nations Commission on International Trade South Africaa 3 Syrian Arab Republic 176 Law—the organization’s council of ministers SAR, Chinab 4 177 adopted amendments to the Uniform Act New Zealandb 5 Djibouti 178 on Secured Transactions in December 2010. United Statesb 6 Eritrea 179 Among the objectives are to make the legal Latviab 7 Madagascar 180 framework in the 16 member states more Australiac 8 São Tomé and Príncipe 181 conducive to lending activities.2 Bulgariac 9 Venezuela, RB 182 Singaporec 10 Palau 183 The amended act allows for the creation of Note: Rankings on the ease of getting credit are based on the sum of the strength of legal rights index and the depth of credit both possessory security (where information index. See the data notes for details. a. , the and are tied in the rankings. the creditor has possession of the collateral) b. Hong Kong SAR, China; ; the ; and are tied in the rankings and nonpossessory security interests (where c. , Bulgaria, and are tied in the rankings. the debtor has possession) in all types of Source: Doing Business database. movable property (such as equipment, DOING BUSINESS 2012 GETTING CREDIT 2

machinery and receivables) while harmoniz- TABLE 2 Who has the strongest legal rights for borrowers and lenders—and who has the weakest? ing the legal framework in which they oper- Strength of legal rights index (0–10) ate. That means greater legal protection for Strongest Weakest lenders in case of nonpayment. It also means Hong Kong SAR, China 10 2 that borrowers can use a broader range of 10 Eritrea 2 assets as collateral, allowing them to obtain Kyrgyz Republic 10 São Tomé and Príncipe 2 on better terms. With uniform imple- Latvia 10 Timor-Leste 2 mentation across all member states in the Malaysia 10 Bolivia 1 coming years, the changes could have a real Montenegro 10 Djibouti 1 impact on access to finance for businesses in New Zealand 10 Palau 1 those 16 African countries. Singapore 10 Syrian Arab Republic1 South Africa 10 Timor-Leste 1 WHY DO SECURED TRANSACTIONS United Kingdom 10 West Bank and Gaza 1 REGULATIONS MATTER? Note: The rankings reflected in the table on legal rights for borrowers and lenders consider solely the law. Problems may occur in the Movable assets, not land or buildings, often implementation of legal provisions and are not reflected in the scoring. See the data notes for details. Source: Doing Business database. account for most of the capital stock of pri- vate firms and an especially large share for Creditor rights and access Legal reform, enforcement and micro, small and medium-size enterprises. to finance economic growth In the developing world 78% of the capital stock of businesses is typically in movable Research has shown that both legal protec- Reforming the legal framework for secured assets, and only 22% in immovable prop- tion for creditors and institutions for sharing transactions can affect the behavior of lend- erty.3 In economies with a modern secured credit information are associated with higher ers. Studies show that banks tend to increase transactions system, these movable assets ratios of private credit to GDP. In developing their lending after amendments of collateral 10 could easily be used as collateral. But in most economies with poorly functioning legal laws. But for a legal reform to have a real developing economies movable property systems, credit markets might depend only impact, enforcement of the rights stipulated would probably be unacceptable to lenders on credit information sharing. But in devel- in laws needs to be possible in practice. The as collateral—either because the law does oped economies with effective systems of enforceability of contracts matters for the 11 not recognize nonpossessory interests in bankruptcy, creditor rights can play a greater structure and pricing of loans. Where en- 6 movable collateral or because it does not role. Strong creditor rights expand the avail- forcement of property rights is weak, lenders provide sufficient protection for lenders ac- ability of loans. One reason is that when tend to offer short-term credit as a way to cepting it. This constraint matters. Research lenders have better legal protection during protect themselves from debtor behavior 12 shows that in developed economies bor- bankruptcy and reorganization of the debtor, such as defaults. rowers with collateral get 9 times as much they become more confident about the Secured transactions reforms are strength- credit as those without it. They also benefit return of their investment in cases of default ening the legal rights of borrowers and from repayment periods 11 times as long and and therefore more willing to extend credit lenders in economies around the world rates up to 50% lower.4 on favorable terms. (figure 2). In secured lending picked Doing Business measures the legal rights of Legal and institutional differences may also up after reforms to its secured transactions borrowers and lenders in secured transac- shape the ownership and terms of bank system, as reflected in an increase in the tions (or collateral) laws and bankruptcy loans around the world. Research finds that lending activity recorded at the registry. laws—to describe how well these laws where creditor protection is stronger, loans The country introduced successive changes facilitate lending (table 2). A modern secured have more concentrated ownership, longer in the past 10 years to improve the system. 7 transactions system provides for the use maturities and lower interest rates. Similarly, The Law on Negotiable Instruments and of security interests in all types of movable where secured creditors have priority over Credit Operations was amended twice, in assets—whether tangible or intangible, unsecured ones, the recovery rate for loans 2000 and in 2003, to introduce modern whether present, after-acquired or future as- tends to be higher and the risks for secured types of security interests. And a nationwide 8 sets, and wherever located—including both creditors lower. And some studies find that registry for movable collateral was created in possessory and nonpossessory interests.5 A creditor rights can help prevent some effects October 2010. In the first 6 months of the modern legal framework for secured lending of an economic crisis, since weak creditor registry’s operation the number of filings also establishes clear priority rules to resolve protection and weak enforcement make almost tripled compared with the same 9 conflicting claims between secured creditors credit markets more volatile. period before the reform, and the registered when a debtor defaults, whether in a bank- loans amounted to a total of $70.9 billion in 13 ruptcy procedure or not. One effective way to financing for Mexican firms. By lowering establish priority rights is to record the secu- the fees associated with registering security rity interest in a centralized collateral registry. interests, the reform also led to savings for DOING BUSINESS 2012 GETTING CREDIT 3

borrowers, estimated at $1.41 billion over the FIGURE 2 East Asia & Pacific and Sub-Saharan Africa strengthened legal rights of borrowers and 6-month period. lenders the most Average strength of legal rights index (0–10) enacted a new secured transac- 7.1 tions law and launched a new collateral regis- OECD high income 7.2 try, which became operational in March 2011. Eastern Europe 5.8 The number of filings is encouraging. During & Central Asia 6.6 the first 4 months of operation there were 5.1 East Asia & Pacific 6.5 1,689 filings, almost 3 times as many as in 4.4 during an entire calendar year—an Sub-Saharan Africa 5.8 impressive record considering that Honduras 4.6 has a considerably smaller economy. Most South Asia 5.6 filings relate to vehicles. But 19% involve com- Latin America 5.0 5.6 mercial assets (and thus commercial loans), & Caribbean such as accounts receivable, retail and whole- Middle East & 2.9 North Africa 3.2 sale inventories, and agricultural, commercial, 0123456785.8 professional and industrial equipment. The DB2006 low value of some of these assets used as DB2012 collateral suggests growth in secured credit Global average for micro and small businesses.14 Note: The data sample for DB2006 (2005) includes 174 economies. The sample for DB2012 (2011) also includes The Bahamas, , Brunei Darussalam, Cyprus, Kosovo, Liberia, Luxembourg, Montenegro and Qatar, for a total of 183 economies. DB2006 continues to strengthen access data are adjusted for any data revisions and changes in methodology and regional classifications of economies. to finance. In 2010 it amended its commer- Source: Doing Business database. cial lien law, improving its legal framework for secured transactions and providing for FIGURE 3 Sub-Saharan Africa takes the lead in reforms providing stronger legal rights the creation of a unified lien registry. Saudi Arabia is now transferring information from Number of Doing Business reforms strengthening legal rights of borrowers and lenders by Doing Business report year Total the different existing registries to the new number of registry, which along with a unified database DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 reforms will soon be available to users. Sub-Saharan Africa 20 (46 economies) WHO REFORMED SECURED Eastern Europe & Central Asia 16 TRANSACTIONS LAWS— (24 economies)

AND WHAT HAS WORKED? East Asia & Pacific 12 In the past 7 years Doing Business recorded (24 economies)

70 reforms strengthening the legal rights in- OECD dex, in 60 economies (figure 3). In 2010/11, high income 9 (31 economies) 23 economies had such reforms, 16 of them Latin America African economies benefiting from the & Caribbean 8 amendments to the Uniform Act on Secured (32 economies) South Asia Transactions (table 3). (8 economies) 4

Implementing a new secured transactions Middle East law and its corresponding collateral registry & North Africa 1 (18 economies) takes around 3 years on average. And the change may not have a noticeable economic 0 reforms 1–4 reforms 5–8 reforms >8 reforms impact right away. As with any legislative Note: An economy can be considered to have only 1 Doing Business reform per topic and year. The data sample for DB2006 (2005) change, that may take some time—because includes 174 economies. The sample for DB2012 (2011) also includes The Bahamas, Bahrain, Brunei Darussalam, Cyprus, Kosovo, Liberia, Luxembourg, Montenegro and Qatar, for a total of 183 economies. the impact depends on users’ awareness Source: Doing Business database. and adoption of the new mechanism. Yet a sound secured transactions system sets the of good practices have evolved. Some have Allowing out-of-court-enforcement stage for future benefits. been used to develop model laws and guide- Creditors are unlikely to extend loans se- Through experience with collateral reforms lines, such as the Inter-American Model Law cured by collateral if they must rely on long, in economies around the world, a number on Secured Transactions (box 1). costly and burdensome court proceedings to DOING BUSINESS 2012 GETTING CREDIT 4

enforce their rights in case of a default. Quick the time the security interest is created. In This has the added benefit of reducing de- enforcement is particularly important for this approach the security agreement is pendence on the courts and thus freeing up movable property, which depreciates over essentially considered to be an execution court resources. time. One way to ensure quick enforcement deed, allowing the secured creditor to seize Today 123 economies allow some sort of out- is to allow parties to a security agreement the collateral or ask a nonjudicial official to of-court enforcement (table 4). But not all to agree to out-of-court enforcement at do so if the debtor contests the enforcement. extrajudicial procedures are efficient. In some economies, for example, the law requires no- tarization of the agreement. This can protect BOX 1 Bringing Latin America and the Caribbean in line with international good practice unsophisticated debtors from abusive credi- The Organization of American States introduced the Inter-American Model Law on Secured tors. But if not managed well, notarization Transactions in 2002. Since then 2 economies have adopted new secured transactions laws largely inspired by the model law—Guatemala (2008) and Honduras (2010). Others have fol- might also imply an added cost for credit. In lowed a piecemeal approach by introducing successive legal reforms, such as Mexico (2000, other economies the law overprotects the 2003, 2010), or adopted just parts of the model law, such as (2006)—with varying de- debtor, making the procedure expensive and grees of success. In 2010 adopted new pledge registry regulations. These implemented a 2007 law that repealed earlier regulations on pledges and created a centralized registry. This unappealing to secured creditors. When legal change is consistent with the model law, though more remains to be done. reform introduces a system of out-of-court The momentum appears to be continuing. has a new law in the draft stage, and enforcement, it needs to strike the right and plan secured transactions reforms in the near future. balance—to protect the rights of all those affected, including the debtor and other creditors. In the past 7 years Doing Business TABLE 3 Who strengthened legal rights of borrowers and lenders in 2010/11—and what did they do? has recorded 39 legal reforms in this area. Feature Economies Highlights Allowing a general description of Expanded range of Chile; ; Liberia; The amended OHADA Uniform Act on Secured Transactions revolving movable OHADA member allows the creation of possessory and nonpossessory secu- collateral assets that can be used economies rity interests on all types of movable property, present and as collateral future. It also harmonizes the legal framework for pledge Some collateral laws require a specific de- mechanisms and introduces new types of security interests scription of the assets in the security agree- such as pledge of financial securities and the transfer of professional as security. ment. This increases transactions costs Allowed out-of-court Honduras; OHADA In Honduras a new law allows out-of-court enforcement of when revolving assets such as inventory enforcement of member economies collateral upon default as long as the parties have agreed collateral to this. The parties also need to agree to the method of are used as collateral—because every time enforcement. inventory is purchased or sold, the security Created a unified Chile; Honduras; Mexico; In Honduras a new unified collateral registry became agreement needs to be updated and per- registry for movable Tonga fully operational.a Users can perform online searches for property registered liens by the debtor’s name. haps even reregistered. Allowing a general Allowed a general Tonga In Tonga a new secured transactions law permits secured description of the collateral makes security description of debts and obligations to be described specifically or in general agreements more flexible and increases ac- obligations terms.b cess to finance. Gave priority to secured Tonga In Tonga the new secured transactions law establishes creditors’ claims outside priority for a security interest over the rights of a lien bankruptcy procedures holder unless a notice of those rights is registered before Laws providing the most flexibility allow the security interest is perfected or before a notice cover- ing the collateral is registered and a security agreement is security interests in all types of movable signed by the debtor. property and permit a generic description a. Accessible at http://www.garantiasmobiliarias.hn. of the assets to secure a loan as long as b. The new law came thanks to the last of a series of secured transactions reforms sponsored by the Asian Development Bank in East Asia and the Pacific. these assets are identifiable—for example, Source: Doing Business database. allowing the contract to stipulate as the col- lateral “inventory of general merchandise as of [date] and for [amount].” Such contracts TABLE 4 Good practices around the world providing strong legal rights for borrowers and lenders typically obligate the debtor to maintain Practice Economiesa Examples the same aggregate value of inventory and Allowing out-of-court enforcement 123 Australia; ; Nepal; Peru; Russian Federation; Serbia; Sri Lanka; United States the same type of goods. For nonpossessory Allowing a general description of 91 Cambodia; ; Chile; ; ; Singapore; security interests to be effective, the debtor collateral Vanuatu; Vietnam needs total freedom to use the assets as Maintaining a unified registry 68 Bosnia and Herzegovina; Guatemala; Honduras; Marshall Islands; Federated States of Micronesia; Montenegro; long as proper care is taken to preserve their New Zealand; Romania; Solomon Islands commercial value. Today 91 economies allow a. Among 183 economies surveyed. a general description of collateral in a single Source: Doing Business database. category and in combined categories. DOING BUSINESS 2012 GETTING CREDIT 5

FIGURE 4 More credit information is another jurisdiction. And a need to search credit scoring. Credit scores, assigned to associated with more credit and multiple registries increases transactions borrowers on the basis of their ability and lower perceptions of finance as a costs. But where registries are unified and capacity to repay , are calculated using constraint computerized, a creditor can immediately information from various sources, including

Private credit as % of GDP check all the registries in an economy from credit reports. The scores make borrowers one location, by searching the debtor’s name. aware of how they are affected by the data that credit bureaus collect. Some banks use Today 68 economies have some sort of credit scores in their loan approval process. centralized registry for movable property used as collateral by companies. But only A growing number of credit bureaus calcu- 15 of these can be characterized as modern, late credit scores. Today, among 89 private notice-based collateral registries. These reg- credit bureaus around the world, 46 report istries offer online access for registration and that they provide credit scores. Not surpris- searches, register all types of encumbrances, ingly, 16 of them are based in OECD high establish clear parameters for priority and income economies; the other 30 are spread maintain a central database searchable by across regions. Sub-Saharan Africa has the the debtor’s name or a unique identifier. least credit scoring because public credit Lower Higher Once registered, security interests immedi- registries, which typically do not provide Economies ranked by depth of ately have effect against third parties. credit scores, far outnumber private credit credit information index, quartiles bureaus in the region. CREDIT INFORMATION Share of firms perceiving finance WHY DOES CREDIT INFORMATION In many small and medium-size busi- as a major constraint (%) SHARING MATTER? nesses have difficulty accessing formal credit and must rely on personal funds. Women, Credit bureaus and credit registries are es- who are more likely to run small businesses, sential parts of the financial infrastructure face the biggest hurdles.15 But the situation that facilitates access to formal finance. By is starting to improve thanks to a new credit sharing credit information, they help reduce information bureau that started operating in information asymmetries, increase access 2009. Imagine Charlotte, a young Bhutanese to credit for small firms, lower interest rates, entrepreneur who runs a small confectionery improve borrower discipline and support business in Thimphu. She wants to expand bank supervision and monitoring. her profitable catering business and has Reducing information asymmetries new customers lined up—but she needs more funds. Charlotte approaches Sonam, a Borrowers typically have more information Lower Higher about their financial situation and invest- loan officer at her bank, for a line of credit. Economies ranked by depth of ment opportunities than lenders do. This Because of the new bureau, Sonam can re- credit information index, quartiles information asymmetry in credit markets view her —and determine that Note: Relationship is significant at the 5% level after controlling affects the relationship between lenders for income per capita. Charlotte qualifies for a low-interest loan and borrowers, especially borrowers that Source: Doing Business database; World Bank, World program for small businesses. Development Indicators database (2010 data); World Bank are small and medium-size enterprises. Enterprise Surveys (2010 data). A credit history is no substitute for risk Banks are more likely to lend to larger firms, analysis. But when banks share credit infor- which typically are more transparent and use Maintaining a unified registry 16 mation, loan officers can assess borrowers’ international accounting standards. Sharing Before accepting collateral, creditors need creditworthiness using objective measures. information on borrowers through credit an effective way to find out whether the And access to credit information not only registries or bureaus is one way to overcome potential borrower has already granted a benefits creditors. It also benefits deserving these asymmetries. Credit reporting systems security interest in the collateral and, if so, borrowers, by increasing their chances to get help lenders learn about borrowers’ charac- what priority those rights have. A central credit. Where credit registries or bureaus are teristics, past behavior, repayment history collateral registry—unified geographically present, allowing easier access to borrow- and current debt exposure. and recording interests in all types of mov- ers’ credit histories, banks are more likely to Increasing access to credit for small able assets—supports the use of movable extend loans (figure 4). collateral to secure loans. If registries are not firms unified across regions, a creditor will have no Besides providing credit information in the Credit bureaus and credit registries are way of knowing whether a security interest form of credit reports, the more advanced one way of increasing access to finance for in an asset has already been registered in credit bureaus offer other services, including individuals and small firms.17 With better, DOING BUSINESS 2012 GETTING CREDIT 6

FIGURE 5 Eastern Europe and Central Asia still leading in credit information reforms Improving borrower discipline Number of Doing Business reforms improving credit information systems by Doing Business report year Credit information sharing can act as a dis- Total ciplinary device for borrowers. When credi- number of tors are known to share information about DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 reforms customers’ credit records, borrowers know Eastern Europe & Central Asia 40 that defaults on loans from one lender may (24 economies) disrupt future access to credit from all other Sub-Saharan lenders. So borrowers have greater incentive Africa 29 (46 economies) to repay.25 Research has shown that repay-

Middle East ment rates can increase by up to 80% when & North Africa 26 a credit registry starts operation.26 According (18 economies) to a recent study surveying 70 utility compa- Latin America & Caribbean 17 nies in the United States, 72% reported that (32 economies) the benefits of credit reporting amounted to East Asia at least 2–5 times the costs. Half of all cus- & Pacific 13 (24 economies) tomers said that they would be more likely OECD to pay their bills on time if those payments high income 11 were fully reported to credit bureaus and (31 economies) could affect their .27 South Asia 8 (8 economies) Supporting bank supervision and      0 reforms 1–5 reforms 6–10 reforms 11–15 reforms 16–20 reforms credit risk monitoring Note: An economy can be considered to have only 1 Doing Business reform per topic and year. The data sample for DB2006 (2005) For regulators, credit information systems includes 174 economies. The sample for DB2012 (2011) also includes The Bahamas, Bahrain, Brunei Darussalam, Cyprus, Kosovo, Liberia, Luxembourg, Montenegro and Qatar, for a total of 183 economies. provide a powerful tool for supervising Source: Doing Business database. banks and monitoring credit risk and credit trends in the economy. Regulators often use cheaper and faster access to credit informa- infrastructure (credit information, creditor information from credit bureaus to assess tion, lending officers can use accurate and rights and collateral infrastructure) as the whether current provisioning is adequate objective data to make unbiased decisions in main obstacles to lending more to such en- and to analyze developments in credit offering loans. And when they can assess the terprises.22 Since 2005 about three-fourths markets and interest rates. The results may risk of default, banks have more incentive to of the region’s economies have reformed guide changes in the legislation governing lend to individuals and small firms. Supported their credit information systems. Yet on aver- financial institutions. Research in , by credit reporting systems, banks can base age less than a quarter of the adult population and Mexico found that credit registries their credit decisions on past borrower be- in the region is covered by a credit reporting played a valuable role in credit risk evaluation havior and therefore sensibly extend credit system. And only 7 of 18 economies in the and in supervision, including in calculations to smaller firms.18 Research shows that bas- region have a private credit bureau. of credit risk for capital or as a check on a ing credit decisions on objective information bank’s internal ratings.28 may improve the availability of credit to the Sharing credit information reduces banks’ uncertainty about borrowers’ total debt poor and increase entrepreneurs’ opportuni- Credit information systems also support exposure, decreasing the costs of screening ties for success, supporting the development competition in the credit market. As more and lowering interest rates.23 By aiding the of micro and small businesses in developing credit information becomes available, com- 19 exchange of information among lenders, economies. A recent study found that petition among banks and nonbank financial registries and bureaus help creditors sort after the introduction of new credit reporting institutions should increase. Research in the systems in developing economies, access to good borrowers from bad ones and price Middle East and North Africa found that lack credit grew twice as fast for small firms as for loans correctly. of credit information systems may curtail 20 large ones. 29 Using data on loans in in competition in the banking sector. Research in 27 transition economies shows 2000–06, researchers found that a better that introducing a credit reporting system is and more intense bank-borrower relationship WHO REFORMED CREDIT associated with an increase of 4.2 percent- improves the likelihood that a loan will be INFORMATION SHARING— age points in firms’ reliance on credit.21 Such approved by 4.2% and reduces the time for AND WHAT HAS WORKED? an effect would be welcome in the Middle processing a loan approval by 0.6 days. With In the past 7 years 87 economies, more than East and North Africa, where banks cite lack the existence of data on repayment behavior, half of those with a credit reporting system of transparency among small and medium- banks required 11.6% less in collateral value as recorded by Doing Business (142 econo- size enterprises and the weak financial for each additional loan a firm took.24 mies), implemented 144 regulatory reforms DOING BUSINESS 2012 GETTING CREDIT 7

to improve credit information systems FIGURE 6 Better credit information systems in all regions (figure 5). Average depth of credit information index (0–6) More than half of these regulatory reforms Latin America 5.4 were aimed at expanding the set of informa- & Caribbean 4.9 tion collected by existing credit registries or Eastern Europe 2.4 4.9 bureaus, such as by removing the threshold & Central Asia for loans to be reported or collecting informa- OECD high income 4.8 4.9 tion from retailers or utility companies. Others East Asia 3.1 4.2 & Pacific established new credit bureaus or registries Middle East & 1.9 3.8 or implemented a regulatory framework that North Africa allows the sharing of data and fosters trust South Asia 2.2 3.7 in the system by both banks and borrow- ers. Since 2005, 20 new credit registries or Sub-Saharan Africa 1.5 2.4 bureaus have been established in economies 01234564.2 that previously had no reporting system. DB2006 DB2012 Doing Business measures both public credit Global average registries and private credit bureaus. Public credit registries are defined as databases Note: The data sample for DB2006 (2005) includes 131 economies. The sample for DB2012 (2011) also includes Bahrain, Cape Verde, managed by the public sector, usually by the Equatorial Guinea, Gabon, Guinea-Bissau, Kosovo, Liberia, Montenegro, Qatar, Swaziland, and Trinidad and Tobago, for a total of 142 economies. DB2006 data are adjusted for any data revisions and changes in methodology and regional classifications of economies. central bank or the superintendent of banks Source: Doing Business database. that collect information on the creditworthi- ness of borrowers and facilitate the exchange sharing of data between banks and borrow- Kenya, and the , of credit information among banks and ers. Regulations on privacy, bank secrecy and even mandate by law that data be shared financial institutions. Private credit bureaus data protection stipulate the type of informa- with private credit bureaus. Economies such are set up in response to commercial oppor- tion that may be shared between banks and as and have established a tunities and market conditions.30 Although private credit bureaus. Regulations on access public credit registry in the central bank with they are private entities and operate in the to credit information specify which data can the clear objective of building a credit infor- private commercial sphere, private credit be available to banks and borrowers. Some mation database that can later be transferred bureaus are regulated by laws that allow the economies, such as , , to a private credit bureau.

FIGURE 7 Credit registries and bureaus around the world DOING BUSINESS 2012 GETTING CREDIT 8

Globally, coverage by credit registries and TABLE 5 Who improved the sharing of credit information in 2010/11—and what did they do? credit bureaus increased from an average of Feature Economies Some highlights 21% of the adult population in 2005 to 38% Improved regulatory Angola; Brazil; Cambodia; Sierra Leone adopted a legal framework for the creation of in 2011. The average depth of credit informa- framework for sharing Madagascar; Malawi; a public credit registry. tion index increased from 3.0 in 2005 to 4.2 credit information Sierra Leone; United Arab Emirates in 2011 (figure 6).31 Expanded set of ; Cape Verde; Armenia began requiring national utility companies to information collected in Croatia; Oman; provide credit data to the credit bureau. Croatia’s private But 41 economies around the world, mainly in credit registry or bureau credit bureau started collecting positive and negative Sub-Saharan Africa and the Middle East and information on firms. Created a new credit Bhutan; FYR Macedonia; Bhutan’s first public credit registry started operations, North Africa, still lack any kind of credit infor- registry or bureau Moldova; Timor-Leste covering 30,000 individuals. mation system (figure 7). And in many that Provided online access Cape Verde; Oman; Oman introduced a new online platform for sharing credit do have one, the credit bureau or registry cov- to data at credit registry Paraguay; Uruguay information. In Uruguay 540,000 firms and individuals can ers only a tiny fraction of the adult population. or bureau now access the public credit registry online. Lowered or eliminated Cape Verde; Madagascar; Madagascar eliminated the minimum threshold for loans threshold for loans Mongolia; Qatar included in the database. In 2010/11, 22 economies strengthened reported their credit reporting system. Improving Expanded historical Cape Verde; Oman; Qatar’s credit registry expanded the historical data avail- the regulatory framework for sharing credit data distributed Qatar; Rwanda able for distribution. information was the most popular feature of Guaranteed by law Algeria; Angola; Slovak In Algeria a new ordinance gave borrowers the right to borrowers’ right to Republic inspect their credit data. credit information reforms (table 5). access data Source: Doing Business database. Specific practices help increase credit coverage and encourage the use of credit negative-only model produced a 3.35% 2002 credit cards became popular. Perhaps information systems. Among the most com- default rate among approved applicants, too popular: many consumers were able to mon measures have been expanding the while the use of both positive and negative accumulate several credit cards because range of information shared, collecting and information led to a 1.9% default rate.32 positive credit information was not shared distributing data from sources other than at the time. There were many banks and lowering or eliminating minimum Experience in Hong Kong SAR, China, pro- defaults, and in 2002 Hong Kong SAR, China, loan thresholds (figure 8). vides another example. Between 1998 and was hit by a severe credit card crisis. Lenders Reporting good as well as bad Credit information can be broadly divided FIGURE 8 Worldwide, reporting data on small loans is the most common feature of credit information sharing into 2 categories: negative and positive. Share of economies where type of data is distributed (%) Negative information covers defaults and late payments. Positive information includes, for example, on-time loan repayments and the original and outstanding amounts of loans. 100

80 A credit information system that reports only negative information penalizes borrow- 60 ers who default on payments—but it fails to 40 reward diligent borrowers who pay on time. 20 Sharing information on reliable repayment al- 0 lows customers to establish a positive credit history and improves the ability of lenders to OECD high income distinguish good borrowers from bad ones. Sharing more than just negative information also ensures that a credit information system Eastern Europe & Central Asia will include high-risk borrowers that have ac- Middle East & North Africa cumulated significant debt exposure without yet defaulting on any loans. Latin America & Caribbean South Asia Data on loans below 1% of income per capita distributed Positive and negative data distributed Sharing full information makes a difference Data from utilities East Asia & Pacific and retailers distributed for lenders. A study in the United States simulated individual credit scores using only negative information and then using Sub-Saharan Africa both negative and positive information. The Source: Doing Business database. DOING BUSINESS 2012 GETTING CREDIT 9

TABLE 6 Good practices around the world in sharing credit information payments to DTE a priority. Within 6 months DTE had 80,000 fewer accounts in arrears.37 Practice Economiesª Examples Distributing data on loans below 1% of 119 Brazil; Bulgaria; ; Kenya; Malaysia; Sri income per capita Lanka; West Bank and Gaza A study in looked at the effect of provid- Distributing both positive and negative credit 100 China; Croatia; India; Italy; Jordan; ; ing a credit bureau with payment information information South Africa from a water supply company.38 The credit Distributing credit information from retailers 54 Fiji; ; ; Rwanda; Saudi bureau, CRIF, set up a credit scoring model, or utilities as well as financial institutions Arabia; the “water score,” which took up to 3 years a. Among 183 economies surveyed. Source: Doing Business database. of payment of water bills into consideration. More than 83% of water customers who wrote off nearly 13% of their total card receiv- loans. Georgia started distributing positive previously had no credit history now have ables, compared with 7.5% for lenders in the and negative information in the summer of a positive one thanks to paying their water United States. Since then the credit bureau 2007. This was in response to banks’ de- bills. This has made it easier for them to has shifted to a full credit reporting system.33 mand for a better understanding of custom- obtain credit. Those benefiting most include ers’ payment patterns. The banks wanted to young entrepreneurs and families with only A study of Latin American economies improve their risk management tools as their one income, 2 of the groups that tend to lack suggests that where private credit bureaus lending grew. The largest banks participated bank accounts in Italy. distribute both positive and negative actively in sharing positive information. The Today credit bureaus or registries in 54 information and have 100% participation positive credit reporting system contributed economies around the world include credit from banks, lending to the private sector is to a 20-fold increase in coverage compared information from sources other than banks, greater (at least 47.5% greater).34 Another with the previous year, from 8,000 borrow- study also looked at the effect of providing ers to 160,000. TABLE 7 Who has the most credit positive and negative information in Latin information—and who the least? 35 America. In Brazil it found that having Collecting and distributing data Depth of credit information index (0–6) access to positive information would from retailers and utility companies Most Least reduce the default rate from 3.37% to One effective way to expand the range of in- Argentina 6 Burkina Faso 1 1.84%—equivalent to about a 45% reduc- formation distributed by credit registries is to Canada 6 Burundi 1 tion in portfolio losses for Brazilian banks. include credit information from retailers and Germany 6 Djibouti 1 The study also showed the gains in terms of utility companies, such as electricity provid- 6 Guinea-Bissau 1 access to credit. While 56% of the sample ers and mobile phone companies. Providing Korea, Rep. 6 Liberia 1 population would get credit if only negative information on payment of electricity and Lithuania 6 Mauritania 1 information is used, more than 82% would phone bills can help establish a good credit Malaysia 6 1 if full information were available. history for those without previous bank Mexico 6 Guinea 0 loans or credit cards. This represents an United Kingdom 6 Madagascar 0 There is good news for potential borrowers important opportunity for including people in Brazil. After 10 years of work to create without traditional banking relationships. A United States 6 Nigeria 0 an appropriate legal framework for shar- recent study across 8 global mobile money ing positive credit data, a new law entered Borrowers covered by credit registries or bureaus operators found that 37% of their customers (% of adults) into force on June 9, 2011, that allows 36 lacked a bank account. Most Least private credit bureaus to collect positive Argentina 100 Liberia 0.65 information. But including this information can be Australia 100 Algeria 0.35 challenging. Utilities and retailers are regu- Canada 100 Burundi 0.28 Today 16 of the 142 economies with a lated by different institutions than financial 100 Nepal 0.26 credit reporting system as recorded by Doing companies are. They also might have to be Business share only negative information. Over convinced that the benefits of reporting bill Ireland 100 Djibouti 0.24 the past 7 years only 7 economies moved to a payment outweigh the costs. New Zealand 100 0.20 full information sharing system (table 6). 100 Mauritania 0.16 A utility in the United States has clearly Sweden 100 Nigeria 0.09 One of these is Oman. On December 20, benefited. In August 2006 DTE Energy, an United Kingdom 100 Madagascar 0.05 2010, its central bank launched the Bank electricity and natural gas company, began United States 100 Guinea 0.02 Credit and Statistical Bureau System. This full reporting of customer payment data to Note: The rankings on borrower coverage reflected in the new system collects positive and negative credit bureaus. DTE customers with no prior table include only economies with a public credit registry or private credit bureau (142 in total). Another 41 economies information on firms and individuals, includ- credit history—8.1% of the total, according to have no credit registry or bureau and therefore no coverage. ing information on any type of credit facility a recent study—gained either a credit file or See the data notes for details. and on both performing and nonperforming a credit score. And customers began to make Source: Doing Business database. DOING BUSINESS 2012 GETTING CREDIT 10

including those where coverage is 100% Lowering or eliminating minimum Today 119 economies have minimum loan (table 7). In these 54 economies coverage loan thresholds thresholds below 1% of income per capita. of borrowers is 17.6 percentage points higher And over the past 7 years 17 economies Where thresholds for the loans included in a than in those where credit bureaus or regis- eliminated their minimum loan threshold. On credit bureau’s database are high, retail and tries do not include information from retail- average in these economies, this more than small business loans are more likely to be quadrupled the coverage. ers or utility companies. These economies excluded. This can hurt those that benefit the include 10 where credit bureaus or registries most from credit information systems—such ’s public credit registry eliminated its started collecting and distributing alterna- loan threshold of 500,000 rupees ($7,605) as female entrepreneurs and small enterpris- tive data in the past 7 years. Kazakhstan’s in 2008. Now all loans are reported to the es, whose loans are typically smaller. Credit first credit bureau broadened its sources registry. Among those demanding this bureaus and registries that collect and dis- of credit information in 2007 by including change was the Pakistan Banks’ Association, tribute data on microfinance loans are more information from the national gas company whose members were facing rapid growth (KazMunayGas) and from retailers such as likely to support female entrepreneurship by in consumer lending and thus in the need furniture companies. This shift, along with a enabling women to build credit histories—be- for credit data. , Tunisia, and West Bank and Gaza also eliminated loan boom in consumer credit lending, led to an cause women make up 76% of all borrowers 39 thresholds in 2008. eliminated 80% increase in coverage by January 2008, from microfinance institutions. Public credit 3 thresholds in 2009: 1,000 manat ($1,314) from 1.62 million borrowers to 2.92 million. registries usually set relatively high thresholds for individuals, 5,000 manat ($6,572) for for loans, $34,260 on average, since their pri- In Rwanda 3 utility companies—2 mobile firms and 10,000 manat ($13,144) for credit phone companies (MTN and Tigo) and an mary purpose is to support bank supervision cards. This action was spurred by the rapid electricity and gas company (EWSA)— and the monitoring of systemic risks. Private growth in consumer loans, which had led started providing credit information to the credit bureaus tend to have lower minimum banks to request more detailed information private credit bureau in April 2011. loan thresholds, $418 on average. on a larger group of borrowers.40

DATA NOTES ON GETTING CREDIT credit registries and private credit bureaus. transactions system. The case scenarios in- Doing Business measures the legal rights The ranking on the ease of getting credit volve a secured borrower, the company ABC, of borrowers and lenders with respect to is based on the percentile rankings on its and a secured lender, BizBank. In certain secured transactions through one set of indi- component indicators: the depth of credit economies the legal framework for secured cators and the sharing of credit information information index (weighted at 37.5%) and transactions means that only case A or case through another. The first set of indicators the strength of legal rights index (weighted B can apply (not both). Both cases examine 41 describes how well collateral and bankruptcy at 62.5%) (figure A.1). the same set of legal provisions relating to laws facilitate lending. The second set mea- the use of movable collateral. sures the coverage, scope and accessibility LEGAL RIGHTS Several assumptions about the secured bor- of credit information available through public The data on the legal rights of borrowers rower and lender are used: and lenders are gathered through a survey ABC is a domestic, limited liability FIGURE A.1 Getting credit: collateral rules of financial lawyers and verified through Ė company. and credit information analysis of laws and regulations as well as Rankings are based on 2 public sources of information on collateral indicators TABLE A.1 What do the getting credit and bankruptcy laws. Survey responses are indicators measure? Scope, quality and accessibility of credit verified through several rounds of follow-up information through public and private Strength of legal rights index (0–10) credit registries communication with respondents as well Protection of rights of borrowers and lenders through as by contacting third parties and consult- collateral laws 37.5% 62.5% Depth Strength ing public sources. The survey data are Protection of secured creditors’ rights through of credit of legal confirmed through teleconference calls or bankruptcy laws information rights index (0–6) index (0–10) on-site visits in all economies. Depth of credit information index (0–6) Scope and accessibility of credit information dis- tributed by public credit registries and private credit Strength of legal rights index bureaus The strength of legal rights index measures Public credit registry coverage (% of adults) the degree to which collateral and bankrupt- Number of individuals and firms listed in a public Regulations on nonpossessory security cy laws protect the rights of borrowers and credit registry as percentage of adult population interests in movable property lenders and thus facilitate lending (table A.1). Private credit bureau coverage (% of adults) Note: Private bureau coverage and public registry coverage Two case scenarios, case A and case B, are Number of individuals and firms listed in largest pri- are measured but do not count for the rankings. used to determine the scope of the secured vate credit bureau as percentage of adult population DOING BUSINESS 2012 GETTING CREDIT 11

Ė The company has 100 employees. Ė A general description of debts and ob- Depth of credit information index Ė ABC has its headquarters and only base of ligations is permitted in the collateral The depth of credit information index operations in the economy’s largest busi- agreement and in registration documents; measures rules and practices affecting the ness city. all types of debts and obligations can be coverage, scope and accessibility of credit secured between the parties, and the Ė Both ABC and BizBank are 100% domesti- information available through either a public cally owned. collateral agreement can include a maxi- credit registry or a private credit bureau. A mum amount for which the assets are score of 1 is assigned for each of the follow- The case scenarios also involve assump- encumbered. ing 6 features of the public credit registry or tions. In case A, as collateral for the loan, Ė A collateral registry or registration institu- private credit bureau (or both): ABC grants BizBank a nonpossessory tion for security interests over movable security interest in one category of movable property is in operation, unified geograph- Ė Both positive credit information (for ex- assets, for example, its accounts receivable ically and by asset type, with an electronic ample, outstanding loan amounts and or its inventory. ABC wants to keep both database indexed by debtors’ names. pattern of on-time repayments) and possession and ownership of the collateral. negative information (for example, late Ė Secured creditors are paid first (for ex- payments, and number and amount of In economies where the law does not allow ample, before general tax claims and nonpossessory security interests in movable defaults and ) are distributed. employee claims) when a debtor defaults property, ABC and BizBank use a fiduciary outside an insolvency procedure. Ė Data on both firms and individuals are transfer-of-title arrangement (or a similar distributed. Ė Secured creditors are paid first (for exam- substitute for nonpossessory security inter- ple, before general tax claims and employee Ė Data from retailers and utility compa- ests). The strength of legal rights index does claims) when a business is liquidated. nies as well as financial institutions are not cover functional equivalents to security distributed. over movable assets (for example, leasing or Ė Secured creditors either are not subject Ė More than 2 years of historical data are reservation of title). to an automatic stay or moratorium on enforcement procedures when a debtor distributed. Credit registries and bureaus In case B, ABC grants BizBank a business enters a court-supervised reorganization that erase data on defaults as soon as charge, enterprise charge, floating charge or procedure, or the law provides secured they are repaid obtain a score of 0 for this any charge that gives BizBank a security in- creditors with grounds for relief from an indicator. terest over ABC’s combined movable assets automatic stay or moratorium (for exam- Ė Data on loan amounts below 1% of in- (or as much of ABC’s movable assets as pos- ple, if the movable property is in danger) or come per capita are distributed. Note sible). ABC keeps ownership and possession sets a time limit for the automatic stay.42 that a credit registry or bureau must have a minimum coverage of 1% of the adult of the assets. Ė The law allows parties to agree in a col- lateral agreement that the lender may population to score a 1 on this indicator. The strength of legal rights index includes enforce its security right out of court. Ė By law, borrowers have the right to access 8 aspects related to legal rights in collateral their data in the largest credit registry or law and 2 aspects in bankruptcy law. A score The index ranges from 0 to 10, with higher bureau in the economy. of 1 is assigned for each of the following scores indicating that collateral and bank- The index ranges from 0 to 6, with higher features of the laws: ruptcy laws are better designed to expand values indicating the availability of more Ė Any business may use movable assets as access to credit. collateral while keeping possession of the credit information, from either a public credit registry or a private credit bureau, to facili- assets, and any financial institution may CREDIT INFORMATION accept such assets as collateral. tate lending decisions. If the credit registry or The data on credit information sharing are bureau is not operational or has a coverage Ė The law allows a business to grant a built in 2 stages. First, banking supervision of less than 0.1% of the adult population, nonpossessory security right in a single authorities and public information sources the score on the depth of credit information category of movable assets (such as ac- are surveyed to confirm the presence of a index is 0. counts receivable or inventory), without public credit registry or private credit bureau. requiring a specific description of the Second, when applicable, a detailed survey In Lithuania, for example, both a public credit collateral. on the public credit registry’s or private credit registry and a private credit bureau oper- Ė The law allows a business to grant a non- bureau’s structure, laws and associated rules ate. Both distribute positive and negative possessory security right in substantially is administered to the entity itself. Survey re- information (a score of 1). Both distribute all its movable assets, without requiring a sponses are verified through several rounds data on firms and individuals (a score of 1). specific description of the collateral. of follow-up communication with respon- Although the public credit registry does not Ė A security right may extend to future or dents as well as by contacting third parties distribute data from retailers or utilities, the after-acquired assets and may extend and consulting public sources. The survey private credit bureau does do so (a score of automatically to the products, proceeds or data are confirmed through teleconference 1). Although the private credit bureau does replacements of the original assets. calls or on-site visits in all economies. not distribute more than 2 years of historical DOING BUSINESS 2012 GETTING CREDIT 12

data, the public credit registry does do so as a database managed by the public sector, as a private firm or nonprofit organization (a score of 1). Although the public credit usually by the central bank or the superin- that maintains a database on the creditwor- registry has a threshold of 50,000 litai, the tendent of banks, that collects information thiness of borrowers (individuals or firms) private credit bureau distributes data on on the creditworthiness of borrowers (indi- in the financial system and facilitates the loans of any value (a score of 1). Borrowers viduals or firms) in the financial system and exchange of credit information among credi- have the right to access their data in both the facilitates the exchange of credit information tors. Credit investigative bureaus and credit public credit registry and the private credit among banks and other regulated financial reporting firms that do not directly facilitate bureau (a score of 1). Summing across the institutions. If no public registry operates, information exchange among banks and oth- indicators gives Lithuania a total score of 6. the coverage value is 0. er financial institutions are not considered. If no private bureau operates, the coverage Public credit registry coverage Private credit bureau coverage value is 0.

The public credit registry coverage indica- The private credit bureau coverage indica- The data details on getting credit can be found tor reports the number of individuals and tor reports the number of individuals and for each economy at http://www.doingbusiness firms listed in a public credit registry with firms listed by a private credit bureau with .org by selecting the economy in the drop- information on their borrowing history from information on their borrowing history from down list. This methodology was developed in the past 5 years. The number is expressed the past 5 years. The number is expressed Djankov, McLiesh and Shleifer (2007) and is as a percentage of the adult population (the as a percentage of the adult population (the adopted here with minor changes. population age 15 and above in 2010 accord- population age 15 and above in 2010 accord- ing to the World Bank’s World Development ing to the World Bank’s World Development Indicators). A public credit registry is defined Indicators). A private credit bureau is defined

NOTES and Nigro 2010. year to bring it into line with UNCITRAL 1. Africapractice 2005. 19. Luoto, McIntosh and Wydick 2004; Brown, (2004, 2007) and World Bank (2011). 2. The OHADA member states are , Burkina Jappelli and Pagano 2009 Faso, Cameroon, the Central African Republic, 20. Brown and Zehnder 2007. REFERENCES Chad, the Comoros, the Republic of Congo, 21. Brown, Jappelli and Pagano 2009. Africapractice. 2005. “Access to Finance: Côte d’Ivoire, Equatorial Guinea, Gabon, 22. Rocha and others 2010. Profiles of African SMEs.” Working Guinea, Guinea-Bissau, , Niger, 23. Brown and Zehnder 2007; Luoto, McIntosh paper prepared for Japan External Trade and . The Democratic Republic of Congo and Wydick 2004; Brown, Jappelli and Organization London Office. will soon become the 17th member state. Pagano 2009; Behr, Entzian and Guettler 2011. Alvarez de la Campa, Alejandro, Everett T. 3. Alvarez de la Campa and others 2010. 24. Behr, Entzian and Guettler 2011. Wohlers, Yair Baranes and Sevi Simavi. 2010. 4. Alvarez de la Campa and others 2010. Secured Transactions Systems and Collateral 25. Padilla and Pagano 2000. 5. World Bank 2011. Registries. Washington, DC: International 26. Brown and Zehnder 2007. Finance Corporation. 6. Djankov, McLiesh and Shleifer 2007. 27. Turner and others 2009. Anzoategui, Diego, María Soledad Martinez 7. Qian and Strahan 2007. 28. Powell and others 2004. Pería and Roberto Rocha. 2010. “Bank 8. Djankov and others 2008. 29. Anzoategui, Martinez Pería and Rocha 2010. Competition in the Middle East and 9. Galindo and Micco 2007. 30. Jappelli and Pagano 1993. Northern Africa Region.” Policy Research 10. Haselmann, Pistor and Vig 2010. Working Paper 5363, World Bank, 31. Straight average of percentages across Washington, DC. 11. Bae and Goyal 2009. economies. Bae, Kee-Hong, and Vidhan K. Goyal. 2009. 12. Diamond 2004. 32. Barron and Staten 2003. “Creditor Rights, Enforcement, and Bank 13. The data on the number of filings and vol- 33. Bailey, Chun and Wong 2003. Loans.” Journal of Finance 64 (2): 823–60. ume of loans were provided by the Mexican 34. Turner and Varghese 2007. government. Other factors in addition to the Bailey, Andre, Suzi Chun and Jeffrey Wong. institutional and legal reforms might have 35. Powell and others 2004. 2003. “Wanted: Asian Credit Bureaus.” contributed to the increase in the filings and 36. CGAP and World Bank 2010. McKinsey Quarterly, no. 2. Available at http:// loan volume. 37. Turner and others 2009; Turner 2011. www.forbes.com/. 14. National Law Center for Inter-American Free 38. Preliminary findings of an ongoing internal Barron, John, and Michael Staten. 2003. “The Trade 2011. study at the credit information services firm Value of Comprehensive Credit Reports: Lessons from the US Experience.” In Credit 15. World Bank 2010. CRIF SpA, Italy. Reporting Systems and the International 39. World Bank 2010. 16. Jappelli and Pagano 2002; Behr, Entzian and Economy, ed., Margaret M. Miller, 273–310. guettler 2011; Brown, Jappelli and Pagano 40. Interview with a private credit bureau in Cambridge, MA: MIT Press. 2009. Azerbaijan. Behr, Patrick, Annekathrin Entzian and 17. Brown, Jappelli and Pagano 2009; Jappelli 41. The ranking is based on a straight average of Andre Guettler. 2011. “How Do Lending and Pagano 2002. points from the strength of legal rights index Relationships Affect Access to Credit and 18. Brown, Jappelli and Pagano 2009; Petersen and depth of credit information index. Loan Conditions in Microlending?” Journal of and Rajan 2002; DeYoung, Frame, Glennon 42. The scoring on this aspect was revised this Banking and Finance 35: 2169–78. DOING BUSINESS 2012 GETTING CREDIT 13

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