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Does the quality of land records affect credit access of households in India?


  • Susan Thomas


  • Diya Uday



Under-utilisation of land as collateral for loans is often attributed to the poor quality of the land records infrastructure, which is seen to both increase the cost of closing credit transactions and the risk in collection if a loan fails. In this paper, we examine the link between the heterogeneity of the quality of the land records infrastructure across states and the access to credit by households in these states using two new data-sets for the analysis. The state-level variation in land record quality is measured using the NCAER Land Records Services Index score while the Consumer Pyramids household data is used to capture household borrowing. Our findings are that there is a weak link between the borrowing patterns of households and quality of land records infrastructure, particularly the availability of spatial records. However, it does not appear that this is sufficient to capture the extent to which households are able to access credit from formal financial sources.

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  • Susan Thomas & Diya Uday, 2021. "Does the quality of land records affect credit access of households in India?," Working Papers 1, xKDR.
  • Handle: RePEc:anf:wpaper:1

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    References listed on IDEAS

    1. Deininger, Klaus & Goyal, Aparajita, 2012. "Going digital: Credit effects of land registry computerization in India," Journal of Development Economics, Elsevier, vol. 99(2), pages 236-243.
    2. Daniel Domeher & Raymond Abdulai, 2012. "Access to Credit in the Developing World: does land registration matter?," Third World Quarterly, Taylor & Francis Journals, vol. 33(1), pages 161-175.
    3. K.P. Krishnan & Venkatesh Panchapagesan & Madalasa Venkataraman, 2016. "Distortions in Land Markets and their Implications to Credit Generation in India," Working Papers id:10562, eSocialSciences.
    4. Timberg, Thomas A & Aiyar, C V, 1984. "Informal Credit Markets in India," Economic Development and Cultural Change, University of Chicago Press, vol. 33(1), pages 43-59, October.
    5. Sudha Narayanan & Judhajit Chakraborty, 2019. "Land as collateral in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-006, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. Pradhan, Narayan, 2013. "Persistence of Informal Credit in Rural India: Evidence from ‘All-India Debt and Investment Survey’ and Beyond," MPRA Paper 80381, University Library of Munich, Germany.
    7. Soontaree Sakprachawut & Damien Jourdain, 2016. "Land titles and formal credit in Thailand," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 76(2), pages 270-287, July.
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    Cited by:

    1. Brijkumar Aggarwal & Diya Uday, 2023. "Technology in Land Administration," Working Papers 27, xKDR.

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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • G2 - Financial Economics - - Financial Institutions and Services
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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