Credit Guarantees Challenging Their Role in Improving Access to Finance in the Pacific Region

Transaction reforms in eight Pacific Island countries have shown the value in ""movable"" assets such as machinery, inventory, and accounts receivable for use as collateral in borrowing. They can benefit businesses and financial institutions that offer business loans. Yet, despit...

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Bibliographic Details
Main Author Asian Development Bank
Format eBook
LanguageEnglish
Published Manila Asian Development Bank 2016
Edition1
Subjects
Credit
Pacific Area
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Summary:Transaction reforms in eight Pacific Island countries have shown the value in ""movable"" assets such as machinery, inventory, and accounts receivable for use as collateral in borrowing. They can benefit businesses and financial institutions that offer business loans. Yet, despite these reforms, financial institutions remain unwilling to lend. Businesses still find it hard to access the credit they need to grow, which in turn creates jobs and drives the economic activity needed in the Pacific. Credit guarantees are often proposed as an instrument to overcome this problem. However, as this report finds, there is no strong theoretical justification for their use.
ISBN:9292575716
9789292575717