From “raw” to “finished”: secured revolving line of credit can axe the SME’s finance challenge
This blog has been originally posted on the World Bank Blogs website.
For most MSMEs, capital and wealth are concentrated in movable assets -- in the developing world, 78% of the capital stock of businesses are inventory, equipment or receivables, and only 22% land and buildings. Conversely though, lending practices in most of the developing world, where wealth concentration in movables can be even greater, is disproportionate with concentration on immovables as the sole type of eligible collateral, most often due to inadequate legal and institutional protections available.
Authors: Pratibha Chhabra