As part of their Doing Business project the World Bank releases two separate indexes that gauge the lending environment in countries around the world. One index measures the legal rights of creditors and debtors, the other index measures the depth of credit information. These indexes are created to measure the following within a nation:
“Strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. The index ranges from 0 to 10, with higher scores indicating that these laws are better designed to expand access to credit.”
“Credit depth of information index measures rules affecting the scope, accessibility, and quality of credit information available through public or private credit registries. The index ranges from 0 to 6, with higher values indicating the availability of more credit information, from either a public registry or a private bureau, to facilitate lending decisions.”
Dividing the score a country received from the maximum possible points for each of the two indexes resulted in a total score. The highest possible score a nation could achieve is 100%; a maximum contribution of 50% from legal rights and 50% from depth of information.
As the world bank notes, each the two indexes measure the lending environment in a particular country. The ease of the facilitating of lending in 143 countries around the world is charted below. A few nations are listed in bold red text, only to highlight particularly interesting results.
- Only three nations, Malaysia, South Africa and the United Kingdom (50%/50%) received the highest possible marks in both legal rights of creditors and debtors as well as the depth of information.
- Nations with very high legal rights, but lower depth of information: Kenya and Singapore, both (50%/33%), Denmark, Nigeria and Ukraine (45%/33%) and Cyprus (45%/17%).
- Nations with lower relative legal rights, but relatively high depth of information: Costa Rica, Dominican Republic, Ecuador, Egypt, Paraguay (15%/50%), Oman, Turkey United Arab Emirates (20%/42%) and Brazil, Italy, Portugal and Russia (15%/42%).
- United States (45%/50%), South Korea (40%/50%), Zambia (45%/42%), Canada, Germany and Japan all (35%/50%)
- France (35%/33%), China (30%/33%), Indonesia (15%/33%)