Master Thesis

More Than Words: Broader information sharing and access to the formal
credit market. (advisor Patrick Behr
Thesis, M.Sc. in Business, Finance Track.

This paper shows how information sharing mechanisms might enable Micro and Small Enterprises (MSEs) to increase their access to formal credit markets. Using a unique dataset provided by the Brazilian Central Bank and Ministry of Labor, a change is applied in the threshold of loans that must be reported and shared by all active financial institutions as a gradual increase in the available information on MSEs. Results suggest that borrowers that benefited by this change obtained more loans and smaller interest rates, and by building a good client pool ended up receiving smaller maturities. Firms were also less likely to delay repayments and present smaller loan losses. This evidence sheds light on information asymmetry and literature on financial inclusion by showing that information sharing mechanisms can improve the decision to offer credit, and MSEs can become less dependent of relationship lending to obtain loans.
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Luiz Claudio Sacramento,
May 23, 2017, 2:57 PM
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Luiz Claudio Sacramento,
May 23, 2017, 3:03 PM