Public Credit Guarantee Schemes and SMEs’ Profitability: Evidence from Italy

2019 ◽  
Vol 57 (sup2) ◽  
pp. 555-578 ◽  
Author(s):  
Stefano Caselli ◽  
Guido Corbetta ◽  
Monica Rossolini ◽  
Veronica Vecchi
Keyword(s):  
Credit Guarantee ◽  
Public Credit

scholarly journals An International Comparison on Excessive Credit Expansion, Credit Guarantee Programs and The Risks Arising

2020 ◽  
Vol 23 (1) ◽  
pp. 83-102
Author(s):  
K. Batu Tunay ◽  
Hasan F. Yuceyılmaz ◽  
Ahmet Çilesiz
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
The Other ◽  
Credit Expansion ◽  
Credit Guarantee ◽  
Credit Supply ◽  
Other Hand ◽  
Credit Guarantees ◽  
Public Credit ◽  
Credit Gap

Crediting in the banking sector plays an important role in all developed and developing countries. For this reason, it is monitored continuously by public authorities and measures are taken to control credit supply in economic growth periods. On the other hand, in an economic slowdown, when banks are reluctant to increase their credit portfolio, public credit guarantee programs are put into use to increase the credit supply. In this study, a sample covering 26 advanced and emerging economies was analyzed, and the effects of credit gap, credit guarantees and economic growth on credits and arising credit risks were investigated. The findings show that both credits and non-performing loans, an important measure of credit risk, are affected by credit gap, credit guarantees, and economic growth. On the one hand, public credit guarantees positively affect economic growth. On the other hand, though they are widely used for supporting small and medium-sized enterprises, our findings suggest that such expansive credit policies might negatively affect the riskiness of the credit portfolios and soundness of the banking sector.

scholarly journals ANALISIS EFEKTIVITAS PENJAMINAN KREDIT USAHA RAKYAT PADA PERUM JAMKRINDO KANTOR CABANG MANADO

2018 ◽  
Vol 13 (02) ◽  
Author(s):  
Timoty Erlan Kenny Umboh ◽  
Grace B. Nangoi ◽  
Heince R. N. Wokas
Keyword(s):  
Qualitative Research ◽  
Research Method ◽  
Bank Loans ◽  
Public Enterprises ◽  
Qualitative Research Method ◽  
Credit Guarantee ◽  
Public Credit ◽  
Credit Programs ◽  
The Government ◽  
Branch Office

Improving the performance of UMKM is faced by various obstacles and challenges on the competition. Lack of capital owned by UMKM entrepreneurs is a challenges at this time.  UMKM entrepreneurs are difficult to obtain loan capital because they don't have enough assets to complete the requirements of bank loans. To solve this problem, the government issued a policy credit program for UMKM with loans named People Business Credit Programs. This study aims to observe the Effectiveness of Credit Guarantee Effort of Public Enterprises at General Company Credit Guarantee Indonesia (Jamkrindo) Manado Branch Office. This research was conducted in Manado City with data taken from Public Credit Guarantee Company of Indonesia (Jamkrindo) Manado Branch Office using Qualitative research method and research method used by interview. The results of this study show that the Effectiveness Credit Guarantee Effectiveness Criteria in Manado has been running Effectively with the Effectiveness criteria in 2015 is 94.02% then in 2016 reached 95.87% and in 2017 reached 93.93%.Keywords : Effectiveness, Credit Guarantee, People Business Credits, UMKM

SMEs, public credit guarantees and mutual guarantee institutions

2016 ◽  
Vol 23 (4) ◽  
pp. 1208-1228 ◽  
Author(s):  
Lorenzo Gai ◽  
Federica Ielasi ◽  
Monica Rossolini
Keyword(s):  
Default Risk ◽  
Structural Characteristics ◽  
Supervisory Board ◽  
Data Set ◽  
Content Type ◽  
Credit Guarantee ◽  
Ex Post ◽  
Credit Guarantees ◽  
Public Credit ◽  
Guaranteed Loans

Purpose The purpose of this paper is to focus on public guarantees granted to micro-, small- and medium-sized enterprises (SMEs) by the Italian national credit guarantee programme (Fondo Centrale di Garanzia – Central Guarantee Fund – (CGF)). The CGF provides a direct guarantee to banks granting loans or a counter-guarantee to mutual guarantee institutions (MGIs) acting as first-level guarantors. Because the behaviour of MGIs could affect the default risk of counter-guaranteed loans, it is vital to investigate their operating and structural characteristics in order to identify an optimal design for public credit guarantee schemes (PCGSs). Design/methodology/approach Using regression models, the paper analyses the determinants of default for 33,229 SME loans guaranteed by an MGI and counter-guaranteed by the Italian CGF. The dependent variable is the ex-post default risk of SMEs’ counter-guaranteed loans in the 2010-2011 period. The explanatory variables are certain characteristics of the MGI. Findings The authors demonstrate that increases in an MGI’s leverage and the size of the counter-guaranteed portfolios increase the default risk. When the counter-guaranteed portfolio increases, MGIs are more risk taking but take less risk than when local and specialized MGIs are at play. Finally, direct public aid is relevant. Practical implications An appropriate design of the PCGS becomes crucial to controlling moral hazard in financial institutions and ensuring the financial sustainability of public intervention in favour of SMEs. Originality/value The paper evaluates an original and confidential firm-level data set that is not available in public documents or supervisory board statistics but is collected directly from the MGIs that participated in this study.

scholarly journals Public Credit Guarantee Schemes in Supporting SMEs: An Evaluation of Effectiveness and Impacts

2019 ◽  
Vol 15 (1) ◽  
pp. 174
Author(s):  
Maria Cristina Arcuri ◽  
Lorenzo Gai ◽  
Federica Ielasi
Keyword(s):  
Small Enterprises ◽  
Probability Of Default ◽  
Manufacturing Companies ◽  
Credit Guarantee ◽  
Access To Credit ◽  
Distress Prediction ◽  
Public Credit ◽  
Micro And Small Enterprises ◽  
Set Up ◽  
Reform Model

Public credit guarantee schemes are set up with the purpose of facilitating access to credit by Small and Medium-sized Enterprises (SMEs). The aim of the paper is to study the effectiveness and impacts of the Italian Central Guarantee Fund (CGF)’s activity, one of the main public guarantee schemes in Europe. This is even more important in the light of the 2018 CGF reform. Analyzing a sample which includes all the guarantees issued by the CGF from 2012 to 2018 on loans made to manufacturing companies, we find that the CGF methodology is partially able to capture the variables affecting the probability of default of SMEs. The CGF scores before the reform show poor capability to forecast risk in the medium term, above all for micro and small enterprises. The post-reform model shows better forecasting ability and a greater consistency with the Z’’-score, one of the most recognized model in the distress prediction literature. The new CGF model may indirectly control the behaviour of lenders and first-level guarantors. In particular, our findings show that the probability of default on exposures covered by a mutual guarantee institution and counter-guaranteed by the CGF is lower than the probability of default of loans granted by a bank and directly guaranteed by the CGF. As a consequence, the direct guarantees need to be more monitored by the CGF and potential effects on the bank behaviour may derive, strengthening ECB’s supervision activities.

The effect of credit guarantee on creating employment and keeping employees of small businesses

2014 ◽  
Vol 34 (1) ◽  
pp. 29-58
Author(s):  
Sung-ho Kang ◽  
Chang-Kyun Chae ◽  
오승현 ◽  
문외솔 ◽  
Chong Ook Rhee ◽  
...  
Keyword(s):  
Small Businesses ◽  
Credit Guarantee
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