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Land as collateral in India


  • Sudha Narayanan

    (Indira Gandhi Institute of Development Research)

  • Judhajit Chakraborty

    (Michigan State University)


Land is often regarded as a crucial factor enabling credit access because it serves as an ideal collateral, for both borrowers and lenders. Yet in reality, in developing countries like India land is not used as collateral for a variety of reasons. This paper maps the use of land as collateral for borrowings by Indian households using a nationally representative survey of households, the All India Debt and Investment Survey (AIDIS) of 2012-13. The goal of the paper is to document the extent and patterns of use of land as collateral. We supplement this with insights from a field survey in select talukas of Maharashtra that examines borrower perceptions of use of land as collateral.

Suggested Citation

  • 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.
  • Handle: RePEc:ind:igiwpp:2019-006

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    References listed on IDEAS

    1. Feder, Gershon & Onchan, Tongroj & Raparla, Tejaswi, 1988. "Collateral, guaranties and rural credit in developing countries: evidence from Asia," Agricultural Economics, Blackwell, vol. 2(3), pages 231-245, November.
    2. Pallavi Chavan, 2012. "Debt of Rural Households in India: A Note on the All-India Debt and Investment Survey," Journal, Review of Agrarian Studies, vol. 2(1), pages 151-161, January-J.
    3. Chavan, Pallavi, 2012. "Debt of Rural Households in India: A Note on the All-India Debt and Investment Survey," Review of Agrarian Studies, Foundation for Agrarian Studies, vol. 2(1), July.
    4. Swaminathan, Madhura, 1991. "Segmentation, Collateral Undervaluation, and the Rate of Interest in Agrarian Credit Markets: Some Evidence from Two Villages in South India," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 15(2), pages 161-178, June.
    5. Timothy J. Besley & Konrad B. Burchardi & Maitreesh Ghatak, 2012. "Incentives and the De Soto Effect," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 237-282.
    6. 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.
    7. Kailas Sarap, 1991. "Collateral and other Forms of Guarantee in Rural Credit Markets: Evidence from Eastern India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 26(2), pages 167-188, July.
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    Cited by:

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

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    More about this item


    Land; collateral; credit; India; household finance; land records;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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