Credit card receivables in Brazil settle in T+30, creating a market for short-term advances that was historically costly and fragmented. Before 2018, each receivable was recorded only by the originating card acquirer, limiting access to other financing providers. The central bank required these receivables to be securitized via registration entities, creating standardized, centralized records. A difference-in-differences analysis shows that relative to the control, treated financing rates fell by around 25 basis points, maturities shortened slightly, and new advances as a share of outstanding loans rose following the reform. This case study shows how market design interventions – information standardization, broader access and greater transparency – enhanced competition and lowered the cost of financing for small and medium-sized enterprises (SMEs).
This paper was originally produced as a final paper for Paul Milgrom's ECON 136: Market Design class at Stanford University.
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