Private Lenders, Banks and Mortgage Credit in Peru. Evidence From Notarised Loans

Zegarra, Luis Felipe

doi:10.1017/s0212610916000082

Cited by 10 publications

(7 citation statements)

References 21 publications

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“…Banks are the most common type of financial intermediary. Several studies have highlighted the importance of banks in Peru in the 1860s and 1870s (Camprubí, 1957; Engelsen, 1978; Zegarra, 2017). Banks channeled funds from the commercial sector, largely from the guano business, into a variety of sectors, including agriculture.…”

Section: Notaries and Information Asymmetriesmentioning

confidence: 99%

Information asymmetries and agricultural credit

Zegarra¹

2019

AFR

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Purpose The purpose of this paper is to analyze the functioning of the rural credit market of Lima from 1825 to 1865, paying special attention to the effect of information asymmetries on the access to rural credit. Design/methodology/approach The article relies on primary sources for the study of the early credit market of Lima. In particular, the study relies on a sample of notarized loans for 1825–1865 and on property tax reports, collected from the National Archives of Peru, to determine the effect of information asymmetries, collateral and regional lending on access to credit. The article also analyzes the legal system of Peru during this period to determine whether property rights were well protected and so collateral could be used in the rural credit market. Findings A revision of the legislation shows that the legal system had some deficiencies, but allowed landlords and tenants to use their assets as collateral. Tax reports show that landlords and tenants owned valuable capital that could be used as collateral. Evidence from notarized loans shows that information asymmetries severely restricted inter-regional lending. In Lima, however, notaries played a role as financial intermediaries, providing the information about potential borrowers and allowing landlords and tenants to access credit. As a result, access to credit was significant for landlords and tenants. Originality/value This paper is one of the few historical studies on the role of information asymmetries in the allocation of rural credit in Latin America. It contributes to our understanding of credit markets prior to the creation of banks.

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Section: Notaries and Information Asymmetriesmentioning

confidence: 99%

Information asymmetries and agricultural credit

Zegarra¹

2019

AFR

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“…22 Also, married women could not be sued and could not sue personally, but through the intervention of their husbands. 23 The figures on credit and interest rates in the first two paragraphs of this section come from Zegarra (2013aZegarra ( , 2013b. below six million soles in 1821-1847 24 .…”

Section: The Credit Market Of Limamentioning

confidence: 99%

“…However, Engelsen relies on loan data from only one notary, only examines agricultural credit (a small portion of all mortgage credit conducted by private lenders), and does not conduct a systematic analysis of the differences in loan conditions between private lenders and mortgage banks to determine whether the creation of these banks represented a significant change from the previous situation. Recently, Zegarra (2013a, 2013b) relied on a sample of notarised loans to study the impact of political stability and mortgage banks on the allocation of credit. Alfonso Quiroz was also a prominent historian who devoted much time to studying the evolution of credit markets in Peru: Quiroz (1994) analysed the role of credit in late colonial Peru, whereas Quiroz (1993) discussed the evolution of credit markets in Peru and its relationship with agricultural development in the late 19 th and early 20 th centuries.…”

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Women and Credit in Peru During the Guano Era. Was There Gender Discrimination in the Mortgage Credit Market of Peru?

Zegarra¹

2014

RHE / JILAEH

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This article analyses the role of women and gender discrimination in the mortgage credit market in Peru between 1860 and 1875. Relying on a large sample of notarised loans, the article shows that women participated in the credit market as lenders and borrowers. However, their participation was lower than that of men. In addition, women received smaller loans and paid higher interest rates than men. The evidence suggests that the lower participation of women as borrowers and their smaller loans were largely a consequence of the distribution of collateral. In addition, much of the difference in interest rates resulted from the differences in loan sizes. As women received smaller loans and there were probably fixed costs involved in granting a loan, making a loan to a woman implied a higher average cost.

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“… 27 See Hoffman et al (2000, 2019) and Dermineur (2018, 2019) for France; De Luca (2013) and Lorenzini (2015) for Italy; Costa et al (2014) for Portugal; Sola (2000), Peña-Mir (2016) and Carvajal (2018) for Spain; Levy (2012) for Mexico; Zegarra (2017a, 2017b) for Peru; and Wasserman (2018) for Argentina. In the Low Countries, although notaries were not so relevant, they nonetheless had an important role.…”

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How Well Were Creditors’ Rights Protected in Early Modern Spain? The Case of the Public Mortgage Registry in Malaga

Peña-Mir

2020

RHE / JILAEH

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New Institutional Economics treats early modern Spain as an example of a state whose political and contracting institutions hindered economic growth. However, the assumption that Spanish political institutions were predatory in this respect has been called into question. This paper challenges the idea that Spain was unable to develop sufficiently good contracting institutions, of which we know relatively little. Using data from Malaga's notarial credit market, I show that legal institutions facilitated contractual compliance in private financial transactions. Specifically, public mortgage registries, which had improved the registration of properties used as collateral since their creation in 1768, favoured the subscription of larger contracts. Furthermore, results suggest that registries could have contributed to the development of a more impersonal credit market.

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Private Lenders, Banks and Mortgage Credit in Peru. Evidence From Notarised Loans

Cited by 10 publications

References 21 publications

Information asymmetries and agricultural credit

Information asymmetries and agricultural credit

Women and Credit in Peru During the Guano Era. Was There Gender Discrimination in the Mortgage Credit Market of Peru?

How Well Were Creditors’ Rights Protected in Early Modern Spain? The Case of the Public Mortgage Registry in Malaga

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