Credit Information Sharing Coverage and Depth and Their Impact on Bank Non-Performing Loans

Abstract

This study provides an international evidence of how credit information sharing coverage and depth impact on bank non-performing loans across the income brackets categorized by the World Bank. Employing anova and robust standard errors OLS estimation techniques, the results suggest that both coverage and depth of information shared are imperative in reducing bank non-performing loans. However, coverage of credit information shared is more effective in reducing non-performing loans with public credit registries while depth of information shared is more effective with private credit bureaus. The findings further prove that the use of both private and public bureaus and registries are more effective in reducing non-performing loans than using either of them. The study finally finds that non-performing in low income countries varied significantly from that of high income countries. These findings are largely consistent with previous studies and require the implementation of policies that deepen the coverage and depth of credit information shared across the income brackets especially low income countries.