Getting Institutions “Right” for Whom? Credit Constraints and the Impact of Property Rights on the Quantity and Composition of Investment

Carter, Michael R.; Olinto, Pedro

doi:10.1111/1467-8276.00111

Cited by 323 publications

(165 citation statements)

References 13 publications

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“…These arguments have led to several investigations into the secure property rights and access to credit relationship. Yet most of such studies in Africa and other parts of the developing world have failed to establish a clear link between secure property rights and access to funding (Brown et al, 2006;Carter and Olinto, 2003;Galeana, 2004;Gilbert, 2002;Petracco, and Pender, 2009;Place, and Migot-Adholla, 1998). That notwithstanding, the argument continuous to gain popularity amongst various governments and development partners leading to the massive rollout of various property rights registration programmes around the 6 developing world.…”

Section: Soto In His Book the Mystery Of Capital: Why Capitalism Trimentioning

confidence: 99%

Secure property right as a determinant of SME’s access to formal credit in Ghana: dynamics between Micro-finance Institutions and Universal Banks

Domeher

Abdulai

Yeboah

2016

Journal of Property Research

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Does registered land title help to improve tenure security and enhance one's chances of securing a loan from formal financial institutions? This question continues to sharply divide opinions among academics, policy makers and international development partners. The long running debate on the subject of 'Property in the Commons', which serves as the ideological origin of what has become known as 'Washington Consensus' in contemporary times claims that there is positive correlation between the possession of registered land title and access to credit. However, this has often received considerable rebuttals. Even if the 'Washington Consensus' is accepted, the argument is still laced with some fundamental difficulty because it inherently assumes and treats financial institutions as a homogenous class of business. Yet financial institutions exhibit greater diversity in their operations and decision making process. This paper attempts to contribute towards developing improved understanding between the 'secure land title and access to credit relationship' by disaggregating financial institutions into Micro Finance and UniversalBanks and examining what role secure land title play in granting credit from the perspectives of these two categories of financial institutions. To achieve this, field level investigations were conducted amongst officials of both Microfinance Institutions (MFIs) and Universal Banks in Ghana using structured questionnaires. A total of 200 questionnaires -100 each to MFI and Universal Banks were administered of which a response rate of 51 and 57 was respectively achieved. The data was analysed using various non-parametric statistics. The study amongst other things established that universal banks and MFIs differ in their opinions on how important secure titles are in the lending process and the nature of the influence they can exert on the final lending decision. It was established that both categories of lenders do regard secure titles as important but whether or not it will influence their decision to accept a given landed property as collateral varies across lender types.

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Section: Soto In His Book the Mystery Of Capital: Why Capitalism Trimentioning

confidence: 99%

Secure property right as a determinant of SME’s access to formal credit in Ghana: dynamics between Micro-finance Institutions and Universal Banks

Domeher

Abdulai

Yeboah

2016

Journal of Property Research

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“…They may accrue only to wealthy producers (Carter and Olinto 2003) and often expectations for property rights reform to improve credit access failed to materialize (Field and Torero 2006). One reason is that better access to information on land ownership will affect credit supply only if other impediments are absent, i.e., if agents have been credit constrained before and are endowed with sufficient levels of illiquid wealth that can be foreclosed upon at reasonable cost (Besley and Ghatak 2010).…”

Section: Empirical Evidencementioning

confidence: 99%

Environmental and Gender Impacts of Land Tenure Regularization in Africa: Pilot Evidence from Rwanda

Ali¹,

Deininger²,

Goldstein³

2011

Policy Research Working Papers

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Although recent developments greatly increased interest in African land tenure, few models to address these issues at the required scale have been identified or evaluated. Rwanda's nation-wide land tenure regularization programme is of great interest. A discontinuity design with spatial fixed effects that is used to evaluate the pilot for this programme points to three main effects; namely, (i) improved land access for legally married women and better recordation of inheritance rights; (ii) significant and large investment impacts that are particularly pronounced for women; and (iii) a reduction in land market activity rather than distress sales. Implications for programme design and policy are discussed.

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“…While credit advantages of land titling have been reported in the literature (Feder et al 1998), positive impacts have often been limited to larger land owners (Mushinski 1999;Carter and Olinto 2003), and some studies failed to find credit effects even where they were expected Fort 2007). Even if profitable projects exist, legal restrictions on land sales (Sundet 2004), limited commercial value of the land (Galiani and Schargrodsky 2005;Payne et al 2008), and social or political considerations that limit foreclosure may jeopardize realization of credit effects.…”

Section: Environment For Developmentmentioning

confidence: 99%

Impacts Of Land Certification On Tenure Security, Investment, And Land Markets: Evidence From Ethiopia

Deininger

Ali

Alemu

2008

Policy Research Working Papers

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While early attempts at land titling in Africa were often unsuccessful, the need to secure land rights has kindled renewed interest, in view of increased demand for land, a range of individual and communal rights available under new laws, and reduced costs from combining information technology with participatory methods. We used a difference-in-difference approach to assess the effects of a low-cost land registration program in Ethiopia, which covered some 20 million plots over five years, on investment. Despite policy constraints, the program increased land-related investment and yielded benefits significantly above the cost of implementation.

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Getting Institutions “Right” for Whom? Credit Constraints and the Impact of Property Rights on the Quantity and Composition of Investment

Cited by 323 publications

References 13 publications

Secure property right as a determinant of SME’s access to formal credit in Ghana: dynamics between Micro-finance Institutions and Universal Banks

Secure property right as a determinant of SME’s access to formal credit in Ghana: dynamics between Micro-finance Institutions and Universal Banks

Environmental and Gender Impacts of Land Tenure Regularization in Africa: Pilot Evidence from Rwanda

Impacts Of Land Certification On Tenure Security, Investment, And Land Markets: Evidence From Ethiopia

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