What happens when we forget? The effect of removing adverse information on access to credit

Kanis Saengchote and Sunti Tirapat

Economics Letters, 2017, vol. 151, issue C, 96-99

Abstract: In a world with asymmetric information, past information helps borrowers establish reputation and credibility. However, can less information be beneficial? Using a panel of nationally representative sample of borrowers’ credit bureau information, we investigate the impact of the removal of adverse credit information for long-time delinquent borrowers in Thailand on their access to credit. The removal is a deliberated effort by policymakers to allow borrowers to reenter formal credit markets. Contrary to theoretical prediction, we find no evidence of a subsequent expansion in credit.

Keywords: Household finance; Consumer credit; Information; Credit history; Fresh start (search for similar items in EconPapers)
JEL-codes: G18 G21 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:151:y:2017:i:c:p:96-99

DOI: 10.1016/j.econlet.2016.12.015

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