TY - JOUR
T1 - Small is beautiful
T2 - The efficiency of credit markets in the late medieval Holland
AU - Van Zanden, Jan Luiten
AU - Zuijderduijn, Jaco
AU - De Moor, Tine
PY - 2012/2
Y1 - 2012/2
N2 - In this paper, we analyse the functioning of private capital markets in Holland in the late medieval period. We argue that in the absence of banks and state agencies involved in the supply of credit, entrepreneurs' access to credit was determined by two interrelated factors. The first was the quality of property rights protection and the extent to which properties could be used as collateral. The second was the level of interest in borrowing money at the time as well as such borrowing compared with the interest rates on risk-free investments. For our case study, the small town of Edam and its hinterland, De Zeevang, in the fifteenth and sixteenth centuries, we demonstrate that properties were used as collateral on a large scale and that interest rates on both small and large loans were relatively low (about 6 percent). As a result, many households (whether headed by men or women) owned financial assets and/or debts, and the degree of financial sophistication was relatively high.
AB - In this paper, we analyse the functioning of private capital markets in Holland in the late medieval period. We argue that in the absence of banks and state agencies involved in the supply of credit, entrepreneurs' access to credit was determined by two interrelated factors. The first was the quality of property rights protection and the extent to which properties could be used as collateral. The second was the level of interest in borrowing money at the time as well as such borrowing compared with the interest rates on risk-free investments. For our case study, the small town of Edam and its hinterland, De Zeevang, in the fifteenth and sixteenth centuries, we demonstrate that properties were used as collateral on a large scale and that interest rates on both small and large loans were relatively low (about 6 percent). As a result, many households (whether headed by men or women) owned financial assets and/or debts, and the degree of financial sophistication was relatively high.
UR - http://www.scopus.com/inward/record.url?scp=84871771011&partnerID=8YFLogxK
U2 - 10.1093/ereh/her007
DO - 10.1093/ereh/her007
M3 - Article
AN - SCOPUS:84871771011
VL - 16
SP - 3
EP - 22
JO - European Review of Economic History
JF - European Review of Economic History
SN - 1361-4916
IS - 1
ER -