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Developing the Mortgage Market: Technology, Property Rights, and Banking

Author

Listed:
  • Angelo D'Andrea

    (Bank of Italy)

  • Patrick Hitayezu

    (Research Hub, Rwanda)

  • Kangni Kpodar

    (International Monetary Fund and FERDI)

  • Nicola Limodio

    (Bocconi University, BAFFI, IGIER and CEPR)

  • Andrea Filippo Presbitero

    (International Monetary Fund and CEPR)

Abstract

Combining administrative data on credit, mortgages, and construction in Rwanda, this paper shows that technology helps overcome imperfections in property rights and foster the development of the mortgage market. Exploiting quasi-experimental variation in 3G internet coverage and a land title reform, we find that mobile connectivity shifts borrowers from microfinance to banks. 3G internet facilitates the distribution of land titles, which borrowers use as collateral for bank loans and mortgages, thus promoting household investment in real estate. A mediation analysis and structural estimation reveal that the property rights channel accounts for 30-37% of the effect of mobile internet on bank lending and 75-80% of the effect on collateralized loans.

Suggested Citation

  • Angelo D'Andrea & Patrick Hitayezu & Kangni Kpodar & Nicola Limodio & Andrea Filippo Presbitero, 2025. "Developing the Mortgage Market: Technology, Property Rights, and Banking," Mo.Fi.R. Working Papers 195, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    • Handle: RePEc:anc:wmofir:195
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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