Testing de-Soto's hidden capital...

Now here is a paper which I think is potentially brilliant - finally someone is testing Hernando de Soto's hypothesis that if only people in developing countries could used the capital stored in their (even meagre) housing, they could use it as collateral to get credit and get themselves out of poverty. The lesson for poor governments was (if I remember correctly), sort out your property rights and the rest will follow. So what does the evidence say? Well,

the effects [on profits and interest rates] are likely to be non-linear and heterogeneous by wealth group. They also depend on the extent of competition between lenders. There can be significant increases in profits and reductions in interest rates when credit markets are competitive.

Hmmm. As far as I understand it then,  there is large variation, presumably relating to the type of house being used as collateral, and actually it all depends on the credit market anyway. As developing country credit markets are renowned to be tight for pretty much all but large companies (a fascinating paper here on that - actually more self-promotion but anyway) and government bonds,  then to some extent the granting of property rights to use as collateral is good, but perhaps isn't actually the "binding constraint". And anyway, the record for micro-credit is also pretty ambiguous I believe. Does this mean the de Soto effect was a bit of a red herring? Maybe I'll have to actually read the paper....