accompanied by registration of mortgage transactions, helps to overcome the problems of asymmetrical informnation and the related incentive problems of moral hazard and adverse selection. These collateral arrangements are crucial to lending institutions and the credit markets because they partly or fully shift the risk of loan loss from the lenders to the borrowers since a default on the loan would trigger the loss of collateral to the borrower. The prospect of losing property rights to the collateral works as an incentive for the borrower to repay the loan; at least, it works as an incentive for borrowers to avoid intentional default (moral hazard). In addition, collateral mitigates the problem of adverse selection as it enables the lender to screen out borrowers most likely to default.

In the event of default, property rights to collateral are transferred to the lender, if there are adequate legal and regulatory arrangements for foreclosure. The lender can then sell the collateral (land) to recover the loan if there is an active land market, free of sale restrictions. Land is regarded as a highly suitable collateral asset, with desirable characteristics particularly the fact that it is immovable, difficult to be permanently damaged and has low maintenance requirements (Binswanger and Rosenzweig, 1986).

For a given interest rate, the amount of credit is expected to increase as the value of the collateral increases, up to a point when credit rationing is triggered (Stiglitz and Weiss, 1981, op. cit.). In addition, for a given amount of credit, the interest rate will be substantially lower when collateral is used. Consequently, farmers with titled and transferable land can obtain credit at a lower cost and higher amount (than farmers without titles) as has been verified by empirical studies done in Thailand and Honduras (Section I).

A combination of an increase in investment demand and credit supply associated with land registration leads to more investment, greater use of variable inputs, higher output per unit of land, greater income and higher land values. This contention is supported by empirical evidence from Thailand, Honduras, Philippines, Brazil, Indonesia and Zimbabwe which is reported in Section I above. But this is not to argue that the positive impact of land registration is universal. We have already found that the expected benefits of land registration did not materialize in the studies of Kenya, Ghana, Rwanda and Somalia (Section I). "The above model only provides a general framework, and the extent to which it applies to a given country depends largely on the policies, traditions, culture and other specific factors" (Feder and Nishio, 1998, op. cit., p.28).

IV. A **Conceptual Framework of Land Registration, Financial Development and Economic Growth** While the conceptual framework linking landownership security to farm productivity has two key linkages, the economic conceptual framework linking land registration to financial development and economic growth has five, namely: (i) the land tenure security and investment incentives linkage; (ii) the land title, collateral and credit linkage; (iii) the land liquidity, deposit mobilization and investment linkage (iv) the land markets, transactions and efficiency linkage; and (v) the labor mobility and efficiency linkage (Figure 2).

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