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2007, No. 4
Posted 2007-02-02

Access to Credit

by Luke M. Shimek and Rajdeep Sengupta

A large part of the world lives in poverty, lacking access to credit. Economic theory implies that lenders make more loans if they have (i) good information about creditworthiness and (ii) effective legal recourse to protect their interests in case of defaults. Recent research argues that these attributes are important for economic development.