Template-type: ReDIF-Paper 1.0
Author-Name: Jaap Bos
Author-Name: Ralph De Haas 
Author-Name: Matteo Millone 
Title: Show Me Yours and I’ll Show You Mine: Sharing Borrower Information in a Competitive Credit Market
Abstract: We exploit detailed data on approved and rejected small business loans to assess the impact of the introduction of a credit registry in Bosnia and Herzegovina. Our findings are threefold. First, mandatory information sharing tightens lending at the extensive margin as more applications are rejected, in particular in areas with strong credit market competition. These rejections are increasingly based on hard information—especially positive borrower information from the new registry—and less on soft information. Second, lending standards also tighten at the intensive margin: the registry leads to smaller, shorter and more expensive loans. Third, the tightening of lending along both margins improves loan quality. Default rates go down in particular in high competition areas and for first-time borrowers. This suggests that a reduction in adverse selection is an important channel through which information sharing affects loan quality. 
Classification-JEL: D04, D82, G21, G28 
Keywords: Information sharing, credit market competition, hazard model
Length: 52 pages 
Number: 1508
Creation-Date: 2015
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp1508.pdf
File-Format: application/pdf
File-Size: 1425
Handle: RePEc:baf:cbafwp:cbafwp1508