World Bank Group President David Malpass attends a press conference in New Delhi. (Photo: AFP/VNA)

The World Bank report highlighted the risks of spillover effects given the interrelated nature of households, firms, financial sector institutions, and governments. High levels of non-performing loans and hidden debt impair access to credit, and disproportionately reduce access to finance for low-income households and small businesses, the report noted.

The report called for greater efforts to manage distressed loans, including relaxing bankruptcy mechanisms, out-of-court solutions for small businesses, and addressing sovereign debt distress. Low-income countries were urged to manage government debt.