ABSTRACT
For the poor, the implication is stark: even a good entrepreneur with a brilliant business idea will not qualify for a loan for lack of ownership of collateralizable assets (i.e. of assets that can serve as collateral with the lender). Capital markets selectively fail the poor as they are wealth-constrained by the collateral requirement. Lack of access to capital markets for the poor is then part of a vicious circle whereby poverty reproduces poverty through capital-market exclusion.
