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Enhancing Access to Land and Real PropertyLandlessness is one of the greatest predictorsof poverty. Increasing security of propertyrights will have limited direct benefits for thosewho do not have any real assets at all. Whileland rental markets can, in rural areas, providean important avenue for greater land access bythe poor and landless, they need to be complementedby other measures to increase the assetendowment of the poor in situations where hugeinequalities persist.Create an Enabling Environment for Rental Markets.In most developing countries land and realproperty rental markets are underdeveloped. Butland and real property rentals are increasing. Productivity-enhancingrental transactions will notfully materialise or the poor may be excluded, ifleasehold tenure is insecure or restrictions constrainland leasing. 176 Replacing them with policiesthat facilitate renting will improve access to land bythose remaining in the rural sector. 177 More robustand transparent guarantees should strengthen theposition of slum dwellers in rental arrangementsand protect them from arbitrary eviction.Legal Recognition of Informal Settlements.Ensure the property rights of urban shantydwellersand rural state land squatters by grantingthem title to their already occupied landsor suitable alternatives (see Section 5 of thisChapter), and introduce anti-eviction rights, limitationsof compulsory acquisitions, resettlementpolicies, adverse possession rights and family/group rights. 178Making Land Reform Effective for IncreasingProductive Assets by the Poor. Land markets,or formalisation of existing land rights, are nota panacea for addressing structural inequalitieswhich reduce productivity of land use and holdback development. 179 To overcome the legacy ofBox 7 Mexico: the poor rely onpawnshops instead ofbanksMost Mexican citizens do not have access to bankingand only 13 percent hold mortgage debt. In theabsence of financial institutions, the poor and lowermiddle classes rely on pawn shops. As movablecollateral valuation of consumer goods is difficult toestablish, the value of the collateral typically shortchangesthe consumer. The annualised rate chargedby these pawnshops ranges from 48 percentcharged by a non-profit pawnshop to 160 percent bya for-profit pawnshop. Some pawnshops will accepthouses as collateral (whether the underlying landis legally owned or not) in exchange for three yearloans.(La Crónica de Hoy, El top ten de la usura: la casade empeño Mister Money cobra 159.6 percent deinterés anual; Prenda Fácil, 146 percent; Montepío48 percent. Mexico City, October 9, 2006.)such inequality, ways of redistributing assets suchas land reform will be needed. While the post-warexperiences of China, Japan, Korea and Taiwanshow that land reform can improve equity andeconomic performance, many other cases whereland reform could not be fully implemented oreven had negative consequences illustrate the difficultiesinvolved. Where redistributive land reformis found to be more cost-effective in overcomingstructural inequalities than alternatives, it needs tobe complemented by access to managerial ability,technology, credit, and markets for the new ownersto become competitive. A possible alternative, theimpact of which needs to be explored more systematically,is the distribution of small house andgarden plots to the destitute to increase their foodsecurity and social status while at the same timeallowing them to climb at least the first rung onthe property rights ladder.Community-Based Land Reform. As an alterna-105