Strength of legal rights index (0=weak to 12=strong) - Country Ranking

Definition: Strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. The index ranges from 0 to 12, with higher scores indicating that these laws are better designed to expand access to credit.

Source: World Bank, Doing Business project (http://www.doingbusiness.org/).

See also: Thematic map, Time series comparison

Find indicator:
Rank Country Value Year
1 Montenegro 12.00 2019
1 New Zealand 12.00 2019
1 Puerto Rico 12.00 2019
1 Azerbaijan 12.00 2019
1 Brunei 12.00 2019
6 Zambia 11.00 2019
6 Colombia 11.00 2019
6 Kenya 11.00 2019
6 Jordan 11.00 2019
6 Australia 11.00 2019
6 Malawi 11.00 2019
6 Rwanda 11.00 2019
6 Tajikistan 11.00 2019
6 United States 11.00 2019
6 Vanuatu 11.00 2019
16 Solomon Islands 10.00 2019
16 Palau 10.00 2019
16 Nepal 10.00 2019
16 Cambodia 10.00 2019
16 Liberia 10.00 2019
16 Mexico 10.00 2019
16 Costa Rica 10.00 2019
16 Afghanistan 10.00 2019
16 Tonga 10.00 2019
25 Nigeria 9.00 2019
25 El Salvador 9.00 2019
25 Canada 9.00 2019
25 Samoa 9.00 2019
25 Jamaica 9.00 2019
25 Kyrgyz Republic 9.00 2019
25 Guatemala 9.00 2019
25 India 9.00 2019
25 Latvia 9.00 2019
25 Romania 9.00 2019
25 Papua New Guinea 9.00 2019
25 North Macedonia 9.00 2019
25 Georgia 9.00 2019
25 Hungary 9.00 2019
25 Mongolia 9.00 2019
25 Russia 9.00 2019
41 Singapore 8.00 2019
41 Ukraine 8.00 2019
41 Vietnam 8.00 2019
41 Honduras 8.00 2019
41 Djibouti 8.00 2019
41 Albania 8.00 2019
41 Panama 8.00 2019
41 Moldova 8.00 2019
41 Kazakhstan 8.00 2019
41 Hong Kong SAR, China 8.00 2019
41 Denmark 8.00 2019
41 Belgium 8.00 2019
41 Bulgaria 8.00 2019
54 Bosnia and Herzegovina 7.00 2019
54 Sweden 7.00 2019
54 Thailand 7.00 2019
54 Turkey 7.00 2019
54 Cyprus 7.00 2019
54 Estonia 7.00 2019
54 United Kingdom 7.00 2019
54 Peru 7.00 2019
54 Poland 7.00 2019
54 Malaysia 7.00 2019
54 Czech Republic 7.00 2019
54 Ireland 7.00 2019
54 Trinidad and Tobago 7.00 2019
54 Slovak Republic 7.00 2019
68 Chad 6.00 2019
68 Togo 6.00 2019
68 Mauritius 6.00 2019
68 Zimbabwe 6.00 2019
68 Israel 6.00 2019
68 Indonesia 6.00 2019
68 Dominica 6.00 2019
68 Central African Republic 6.00 2019
68 Ghana 6.00 2019
68 Burkina Faso 6.00 2019
68 The Bahamas 6.00 2019
68 Barbados 6.00 2019
68 Côte d'Ivoire 6.00 2019
68 Cameroon 6.00 2019
68 Congo 6.00 2019
68 Niger 6.00 2019
68 Lao PDR 6.00 2019
68 Lithuania 6.00 2019
68 Guinea 6.00 2019
68 The Gambia 6.00 2019
68 Guinea-Bissau 6.00 2019
68 Equatorial Guinea 6.00 2019
68 Finland 6.00 2019
68 Gabon 6.00 2019
68 Germany 6.00 2019
68 Comoros 6.00 2019
68 Dem. Rep. Congo 6.00 2019
68 Grenada 6.00 2019
68 Mali 6.00 2019
68 Uzbekistan 6.00 2019
68 United Arab Emirates 6.00 2019
68 Serbia 6.00 2019
68 Senegal 6.00 2019
68 Switzerland 6.00 2019
68 Benin 6.00 2019
68 Armenia 6.00 2019
104 South Africa 5.00 2019
104 Bangladesh 5.00 2019
104 Tanzania 5.00 2019
104 Korea 5.00 2019
104 Croatia 5.00 2019
104 Egypt 5.00 2019
104 St. Lucia 5.00 2019
104 St. Kitts and Nevis 5.00 2019
104 Japan 5.00 2019
104 Lesotho 5.00 2019
104 Botswana 5.00 2019
104 Antigua and Barbuda 5.00 2019
104 Spain 5.00 2019
104 Fiji 5.00 2019
104 Uganda 5.00 2019
104 St. Vincent and the Grenadines 5.00 2019
104 Namibia 5.00 2019
104 Norway 5.00 2019
104 Sierra Leone 5.00 2019
123 Eswatini 4.00 2019
123 Uruguay 4.00 2019
123 France 4.00 2019
123 Chile 4.00 2019
123 Austria 4.00 2019
123 Bhutan 4.00 2019
123 Iceland 4.00 2019
123 Kiribati 4.00 2019
123 Belize 4.00 2019
132 Belarus 3.00 2019
132 China 3.00 2019
132 Guyana 3.00 2019
132 Ethiopia 3.00 2019
132 Liechtenstein 3.00 2019
132 Luxembourg 3.00 2019
132 Saudi Arabia 3.00 2019
132 Sudan 3.00 2019
132 Bahrain 3.00 2019
132 Tunisia 3.00 2019
132 Slovenia 3.00 2019
143 Seychelles 2.00 2019
143 Portugal 2.00 2019
143 Pakistan 2.00 2019
143 Nicaragua 2.00 2019
143 Netherlands 2.00 2019
143 Burundi 2.00 2019
143 Italy 2.00 2019
143 Iran 2.00 2019
143 Mauritania 2.00 2019
143 Myanmar 2.00 2019
143 Madagascar 2.00 2019
143 Morocco 2.00 2019
143 Lebanon 2.00 2019
143 Greece 2.00 2019
143 Algeria 2.00 2019
143 Haiti 2.00 2019
143 Malta 2.00 2019
143 Sri Lanka 2.00 2019
143 Brazil 2.00 2019
143 Argentina 2.00 2019
143 Suriname 2.00 2019
164 San Marino 1.00 2019
164 Venezuela 1.00 2019
164 Kuwait 1.00 2019
164 Ecuador 1.00 2019
164 Mozambique 1.00 2019
164 Paraguay 1.00 2019
164 Dominican Republic 1.00 2019
164 Angola 1.00 2019
164 Cabo Verde 1.00 2019
164 Oman 1.00 2019
164 Philippines 1.00 2019
164 Qatar 1.00 2019
164 Syrian Arab Republic 1.00 2019
177 Somalia 0.00 2019
177 São Tomé and Principe 0.00 2019
177 Timor-Leste 0.00 2019
177 Bolivia 0.00 2019
177 Eritrea 0.00 2019
177 Libya 0.00 2019
177 Iraq 0.00 2019
177 Yemen 0.00 2019

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Development Relevance: Access to finance can expand opportunities for all with higher levels of access and use of banking services associated with lower financing obstacles for people and businesses. A stable financial system that promotes efficient savings and investment is also crucial for a thriving democracy and market economy. There are several aspects of access to financial services: availability, cost, and quality of services. The development and growth of credit markets depend on access to timely, reliable, and accurate data on borrowers' credit experiences. Access to credit can be improved by making it easy to create and enforce collateral agreements and by increasing information about potential borrowers' creditworthiness. Lenders look at a borrower's credit history and collateral. Where credit registries and effective collateral laws are absent - as in many developing countries - banks make fewer loans. Indicators that cover getting credit include the strength of legal rights index and the depth of credit information index. The economic health of a country is measured not only in macroeconomic terms but also by other factors that shape daily economic activity such as laws, regulations, and institutional arrangements. The data measure business regulation, gauge regulatory outcomes, and measure the extent of legal protection of property, the flexibility of employment regulation, and the tax burden on businesses. The fundamental premise of this data is that economic activity requires good rules and regulations that are efficient, accessible to all who need to use them, and simple to implement. Thus sometimes there is more emphasis on more regulation, such as stricter disclosure requirements in related-party transactions, and other times emphasis is on for simplified regulations, such as a one-stop shop for completing business startup formalities. Entrepreneurs may not be aware of all required procedures or may avoid legally required procedures altogether. But where regulation is particularly onerous, levels of informality are higher, which comes at a cost: firms in the informal sector usually grow more slowly, have less access to credit, and employ fewer workers - and those workers remain outside the protections of labor law. The indicator can help policymakers understand the business environment in a country and - along with information from other sources such as the World Bank's Enterprise Surveys - provide insights into potential areas of reform.

Limitations and Exceptions: The Doing Business methodology has limitations that should be considered when interpreting the data. First, the data collected refer to businesses in the economy's largest city and may not represent regulations in other locations of the economy. To address this limitation, subnational indicators are being collected for selected economies. These subnational studies point to significant differences in the speed of reform and the ease of doing business across cities in the same economy. Second, the data often focus on a specific business form - generally a limited liability company of a specified size - and may not represent regulation for other types of businesses such as sole proprietorships. Third, transactions described in a standardized business case refer to a specific set of issues and may not represent the full set of issues a business encounters. Fourth, the time measures involve an element of judgment by the expert respondents. When sources indicate different estimates, the Doing Business time indicators represent the median values of several responses given under the assumptions of the standardized case. Fifth, the methodology assumes that a business has full information on what is required and does not waste time when completing procedures.

Statistical Concept and Methodology: Data are collected by the World Bank with a standardized survey that uses a simple business case to ensure comparability across economies and over time - with assumptions about the legal form of the business, its size, its location, and nature of its operation. Surveys are administered through more than 9,000 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials, and other professionals who routinely administer or advise on legal and regulatory requirements. The Doing Business project of the World Bank encompasses two types of data: data from readings of laws and regulations and data on time and motion indicators that measure efficiency in achieving a regulatory goal. Within the time and motion indicators cost estimates are recorded from official fee schedules where applicable. The data from surveys are subjected to numerous tests for robustness, which lead to revision or expansion of the information collected. For more information on methodology, see http://www.doingbusiness.org/Methodology/getting-credit#legalRights.

Aggregation method: Unweighted average

Periodicity: Annual

General Comments: Data are presented for the survey year instead of publication year. Data before 2013 are not comparable with data from 2013 onward due to methodological changes.