Tenders Are Invited For Research And Evaluation On The Development Impact Of Credit Infrastructure Reforms

Tenders are invited for Research and Evaluation on the Development Impact of Credit Infrastructure Reforms The World Bank Group works to create a world free of poverty on a livable planet through a combination of financing, knowledge, and expertise. It consists of the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). For more information, please visit www.worldbank.org, ida.worldbank.org/en/home, www.miga.org, www.ifc.org, and www.icsid.worldbank.org. 1.2 About SECO SECO is the federal governments centre of excellence for all core issues relating to economic and labour market policy. SECOs aim is to contribute to sustained economic growth, high employment and fair working conditions, by creating the necessary regulatory, economic and foreign policy framework. 1.3 About GFIP 2.0 Phase 2 of the Global Financial Infrastructure Program (GFIP 2) is a 6-year SECO1-supported global program aimed at delivering tailored financial infrastructure reforms to promote access to finance to under-served individuals and micro, small, and medium enterprises (MSMEs). GFIP 2 focuses on three key areas: 1. Credit information systems: Assist governments and other stakeholders in establishing and/or reforming their credit reporting systems to enable the flow of reliable credit-related information in a safe and efficient manner. 2. Secured transactions and asset-based lending: Develop flexible and innovative credit products to increase lending to SMEs using movables as collateral. 3. Insolvency and debt resolution: Design tailor-made reforms of existing insolvency frameworks, as well as out-of-court restructuring solutions (a particularly important tool in times of systemic crises). GFIP 2 has a global knowledge management component and a regional focus with country-level projects. 1.4 Background to the Assignment Access to credit for individuals and businesses remains severely constrained across much of the developing world. Weak legal and institutional frameworks for lending and debt resolution combined with the absence of reliable credit information, limited ability to leverage productive assets, and low predictability for lenders create a financial environment that is particularly unfavorable for micro, small, and medium-sized enterprises (MSMEs). These constraints reinforce cycles of low investment, limited employment growth, and exclusion from formal financial systems, disproportionately affecting women-owned businesses and firms in lower-income markets. Since July 2016, with SECO support, IFC has rolled out the Global Financial Infrastructure Program (GFIP) across multiple regions. Through this program, IFC supported partner countries to develop credit reporting and secured transactions systems, as well as insolvency and debt resolution reforms, contributing to greater financial stability and inclusion and to expanded financial access for female- and male-owned MSMEs. One of SECOs key requirements has been to develop a rigorous methodology to measure the development impact of credit infrastructure reforms going beyond headline output metrics such as the value of financing facilitated and the number of MSMEs reached. Specifically, SECO and IFC wish to understand whether and to what extent two critical dimensions of credit infrastructure reform translate into measurable improvements in firms access to finance: (i) credit information systems (CIS) particularly credit bureaus and credit registries and (ii) movable collateral registries and secured transactions reforms. This assignment will address both reform dimensions through two components within a single research study sharing a common methodological framework. The commissioned research builds on a well-established evidence based on credit infrastructure and firms access to finance, including prior cross-country studies by IFC and World Bank researchers using Enterprise Survey data (e.g., Love, Martínez Pería, and Singh, 2013 and 2016) that documented significant effects of credit bureau and movable collateral registry introduction on firm-level credit access. However, the data landscape has evolved substantially since these studies were undertaken, and new econometric methods have become the methodological standard in applied economics. An updated, extended, and methodologically refreshed study across both reform dimensions is therefore both timely and highly relevant to SECO and to IFCs operational programs. II. RESEARCH OBJECTIVES This assignment examines the development impact of credit infrastructure reform on firms access to finance and firms ability to create new jobs. Credit infrastructure reform is understood broadly to encompass the range of legal, institutional, and informational improvements that shape the functioning of credit markets including the introduction and strengthening of credit bureaus and credit registries, the establishment of movable collateral registries, and reforms to secured transactions. The assignment will produce two complementary research papers sharing a common methodological approach, one focused on credit information reforms and one on secured transactions reforms, together providing a comprehensive empirical assessment of how credit infrastructure reform affects firm financing outcomes. 2.1 Overall Research Objective The overall research objective is to estimate the causal effect of credit infrastructure reforms on firms access to finance, using suitable cross-country quasi-experimental designs. The study will also examine the potential implications of the estimated access-to-finance effects for employment and other development outcomes, drawing on relevant empirical literature. For this assignment, credit infrastructure reforms comprise: (i) credit bureau introduction and improvement; and (ii) movable collateral registry introduction and secured transaction law reform. 2.2 Research Objectives · Estimate the average cross-country causal effect of credit infrastructure reforms encompassing credit bureau introduction and improvement as well as movable collateral registry establishment and secured transaction law reforms - on firms access to finance, using panel datasets spanning multiple countries and years with staggered difference-in-differences identification. · Examine heterogeneous treatment effects across firm size (micro, small, medium), age (young vs. established firms), sector, and gender of ownership, to identify which categories of firms benefit most from credit infrastructure reforms and to generate actionable insights for program design. · Develop an additional synthesis that uses the estimated effects on firm-level access to finance, together with existing empirical literature on the relationship between access to finance and broader development outcomes, to provide indicative illustrative extrapolations, order-of-magnitude estimates of potential implications for variables such as firm growth, investment, employment, productivity, and financial inclusion. 2.3 Research Questions · What is the average cross-country effect of credit infrastructure reforms on firms probability of having a bank loan and the share of investment financed externally? · Do the effects of credit infrastructure reform differ by firm size, age, sector, and/or gender of ownership if yes, to what extent? · What are the distributional patterns consistent across reform types if any? · Do the effects of credit infrastructure reform in countries with weaker baseline financial sector development differ if yes, to what extent? · Do GFIP 2.0 country contexts exhibit distinct dynamics if yes, to what extent? · What indicative development implications can be inferred from the estimated access-to-finance effects, drawing on existing literature on the relationship between financial access and broader economic outcomes? These extrapolations should be clearly distinguished from the causal estimates produced by the empirical analysis. III. SCOPE OF WORK · Develop and apply a common methodological framework for two research components: (i) credit reporting system reforms, covering credit bureau and credit registry and (ii) movable collateral registry and secured transactions reforms, including collateral registry development. Like the previously mentioned reference papers, the study should be global in coverage, focused on emerging markets and developing economies. Adapting the design as needed to reflect differences in reform identification and data availability. · Construct cross-country panel datasets combining firm-level, reform-level, and macro-financial indicators to analyze the effects of credit infrastructure reforms on firm access to finance. Where data permits, distinguish the effects of legal and regulatory reforms from those of system or registry development. · Implement the baseline econometric strategy using staggered difference-in-differences and two-way fixed effects models to compare firms in reforming countries with firms in non-reforming countries before and after reform introduction, with country and year fixed effects and standard errors clustered at the country level. · Assess and apply advanced estimators appropriate for staggered treatment timing and heterogeneous treatment effects, including the Callaway and SantAnna (2021) approach and the Sun and Abraham (2021) interaction-weighted estimator, alongside the baseline specification. · Produce event-study analysis to test the plausibility of parallel trends and to examine th Tender Link : https://wbgeprocure-rfxnow.worldbank.org/rfxnow/public/advertisement/7398/view.html