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Mali Financial Sector Assessment Program : Legal and Judicial Aspects of the Credit Environment

RECEIVER PLEDGES DEPOSIT WORKOUTS RESTRUCTURING TECHNIQUES LEGAL ENVIRONMENT CESSATION OF PAYMENTS LIQUIDATION PUBLIC DISCLOSURE INFORMATION SYSTEM MICROFINANCE SECTOR DEBTORS GUARANTEES SALARY FINANCIAL RESOURCES ECONOMIC ASSETS DEBTOR ASSET MORTGAGE DOMESTIC LAW LOAN REHABILITATION PROCEDURES OWNERSHIP DEBT OVERHANG COURT EMPLOYEES PAYMENTS TITLES CREDITORS CREDITOR PROVISION OF CREDIT BUDGET POSITION OF CREDITORS JUDICIAL DECISIONS CONCESSION FINANCIERS SETTLEMENTS EQUITY SWAPS DOMESTIC LAWS JUDICIAL PROCEDURES OWNERSHIP RIGHTS TRAINING FOR JUDGES MORTGAGES COMMON LAW COUNTRIES MOVABLE PROPERTY COMMERCIAL CODE BENEFICIARY LEGAL PROVISIONS ENFORCEMENT OF SECURITY TITLE GRACE PERIODS JUDGE RESTRUCTURING FORFEITURE COMMERCIAL COURT JUDGES INSOLVENT ENTERPRISES INTERNATIONAL TRADE LAW PAYMENT FINANCIAL INSTITUTIONS LAND REGISTER MARKETS DEBT COMMERCIAL COURTS JUDGES SMALL DEBTORS SETTLEMENT CREDITOR RIGHTS BANK CREDITORS NEGOTIATIONS BINDING DECISION LOANS POSSESSION GOOD FAITH BANK CREDIT LEGAL FRAMEWORK FINANCE JUDICIAL SYSTEM TRANSACTIONS LAND TITLES EQUITY TRADE LAW INTERNATIONAL TRADE LEGAL TOOLS FUTURE ASSETS FINANCIAL CRISIS FUTURE RETURNS CREDIT CONCESSIONS INVESTOR CONFIDENCE CLAIMS CREDIT INFORMATION PROPERTY CREDIT REPORTING OUT-OF-COURT WORKOUTS PAYMENT HISTORY RECEIVERS ASSETS COLLECTION PROCEEDINGS DEFAULT PERSONAL PROPERTY LAND REGISTRY FORCED SALE EVENT OF DEFAULT LAND TITLE CREDIT INFORMATION SYSTEM ENFORCEMENT INSURANCE ACCESS TO CREDIT MICROFINANCE DIRECT PAYMENT INVESTOR LIQUIDATION PROCEEDINGS SECURITY FINANCIAL SITUATION INSOLVENT MORTGAGE SYSTEM CIVIL LAW IMMOVABLE PROPERTY INSOLVENCY JUSTICE SYSTEM INVESTMENTS INTERNATIONAL LAW LENDING IMMOVABLE ASSETS UNDERLYING ASSET BANKING LAW FINANCIAL SYSTEMS INSOLVENCY LAW COMMON LAW LAND MANAGEMENT CREDIT INSTITUTIONS GUARANTEE BUSINESS LAW CLAIM COMMERCIAL COURT REAL PROPERTY ESTATE
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Washington, DC
Africa | Mali
2016-05-10T21:08:32Z | 2016-05-10T21:08:32Z | 2015-12

A country’s legal and judicial environment can help or hinder access to credit. In addition to the banking law governing the organization of the sector, the operations of credit institutions are subject to several laws. Four components of Malian business law are particularly relevant in assessing the position of creditors, the law on secured transactions, the law on collective proceedings, the law on information-sharing related to debtors (sometimes called the credit reporting law), and the law on collection and enforcement proceedings. If creditors cannot have confidence in their legal environment, they will be inclined to lend only to persons they know well. In this regard, it is telling to note that in Mali, the 50 biggest clients account for 39.3 percent of the credit extended by banks (although this percentage has fallen in recent times). Furthermore, access to credit remains a major constraint in the Malian business world. Although the reasons are not confined solely to the legal sphere, it is important to point out that, according to the 2010 Enterprise Survey, Malian enterprises cited access to credit as the main constraint hampering the business environment (43.9 percent of enterprises). The same study showed that in the case of loans involving a security right, the value of the assets pledged stood at 201.4 percent of the amount borrowed, reflecting the lack of confidence by banks in their ability to actually enforce their rights. In addition, in view of the fact that 58 percent of loans require a pledged asset which, in most instances, takes the form of immovable property, persons who do not own such assets are, de facto, shut out of the system and unable to seek credit.

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