NON-FINANCIAL CREDIT INFORMATION SHARING AND NON-PERFORMING LOANS: AN ANALYSIS USING DOING BUSINESS DATABASE

Authors : Arzu Sahin

Pages : 264-279

Doi:10.17261/Pressacademia.2017.686

View : 16 | Download : 11

Publication Date : 2017-09-30

Article Type : Research

Abstract :Purpose- This paper suggests that sharing of credit information from non-financial information sources decrease the non-performing loan rate. To analyze whether the differences in non-financial information sharing across countries have any effect on the percentage of nonperforming loan, a sample of 55 countries from Doing Business 2017 is analyzed. Methodology- Cross section regressions on country level data for the year 2015 is estimated by Ordinary Least Squares Method. Findings- Analysis findings reveal that availability of non-financial credit information from retails and utilities companies, as addition to financial sources, in a credit reporting institution lower the bank non-performing loan rates. Conclusion- It can be concluded that the payment behavior reported by non-financial information providers can cause to a reduction in information asymmetries between lenders and borrowers.  
Keywords : Credit information sharing, non-financial information, comprehensive credit reporting, non-performing loans