The surety bond is an instrument through which the superior credit of the surety is substituted for the uncertain credit of the principal; hence, if the surety is asked to bond a principal of somewhat doubtful credit, the requirement of cash collateral is frequently imposed.
10 12 21 The inner ear is specifically sensitive to transient ischaemia because of its high metabolic requirements and lack of collateral blood supply.
The study conducted a multiple regression analysis so as to determine the regression coefficients which shows that all the independent variables of collateral requirement, awareness of funding opportunities, structure of financial sector, and small business support services to the dependent variable have a significant contribution to access to finance (Table 6).
The study sought to establish the influence of collateral requirements on access to finance.
Yet, small and medium enterprises still face a number of constraints in accessing bank financing attributed to lack of collateral requirements, structure of the financial sector, awareness of funding opportunities, and small business support services (Manasseh, 2004).
The constraints faced by SMEs are associated with the lack of clear financial plans, the accounting documentation, higher rate of interest, and the lack of collateral requirements (MIC, 2007).
Lack of collateral requirements, low income, problems in filing tax repayment reports and unsound business plans are some of the major reasons for the unwillingness of the formal banks lending credit, to majority of entrepreneurs who own micro and small enterprise (SMEs) (Sacerdoti [2005]).
Some studies (Bigsten, 2003; Yitayal, 2004), with the main focus on the developing countries, observed that the lack of collateral requirements, high risks, information asymmetries, small credit transactions particularly of rural households, and the distance between lender-borrowers as the main causes for credit variation among the different and existent sources of credit.
Nor is it by any means certain to happen, despite the advantages of a rationalised system greater efficiency and lower requirements for collateral from its users.
First, there is rehypothecation: the reuse of collateral in a chain of transactions that means the European banking system has huge liquidity requirements as soon as things go wrong.
