Abstract
Purpose- This paper suggests that sharing of credit information from non-financial information sources decrease the non-performing loan rate. To analyze whether the differences in non-financial information sharing across countries have any effect on the percentage of nonperforming loan, a sample of 55 countries from Doing Business 2017 is analyzed. Methodology- Cross section regressions on country level data for the year 2015 is estimated by Ordinary Least Squares Method. Findings- Analysis findings reveal that availability of non-financial credit information from retails and utilities companies, as addition to financial sources, in a credit reporting institution lower the bank non-performing loan rates. Conclusion- It can be concluded that the payment behavior reported by non-financial information providers can cause to a reduction in information asymmetries between lenders and borrowers.
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