Most readers, especially those with car loans or home mortgages, know about 'collateral' property that the lender can take away from the borrower in the event that the borrower defaults. In low/middle income countries, it is understood that conservative lenders exclude firms from credit markets with their excessive collateral requirements. Usually, this is because only some property is acceptable as collateral: large holdings of urban real estate and, sometimes, new motor vehicles. Microenterprises, SMEs, and the poor have little of this property but they do have an array of productive assets...
Most readers, especially those with car loans or home mortgages, know about 'collateral' property that the lender can take away from the borrower in t...