As regards collateral, the pledging of collateral increases the PD when compared with unsecured lending. Within secured loans, the PD of those that are 100% secured is lower than that of those secured to a value of over 50% but not to a full 100%, although the latter account for only a small percentage of the sample. Finally, loans guaranteed by a credit institution or the public sector have a lower likelihood of default, less even than in the case of unsecured loans. Note that this latter class of loan is subject to a double evaluation, . by the bank.
