Bank–firm relations and the role of Mutual Guarantee Institutions at the peak of the crisis

Bartoli, Francesca; Ferri, Giovanni; Murro, Pierluigi; Rotondi, Zeno

doi:10.1016/j.jfs.2012.03.003

Cited by 48 publications

(28 citation statements)

References 23 publications

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“…Confidi in fact appear to be better able to carry out peer screening and monitoring than banks (Columba, 2010;Mistrulli & Vacca, 2011). Bartoli et al (2013) find that Italian firms assisted by Confidi are less likely to experience financial distress. They also find that the positive effect of a Confidi guarantee is higher for SMEs with a shorter bank relationship length.…”

Section: Literature Review and Research Hypothesesmentioning

confidence: 74%

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

Arcuri¹,

Gai²,

Ielasi³

2019

IJBM

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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.

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Section: Literature Review and Research Hypothesesmentioning

confidence: 74%

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

Arcuri¹,

Gai²,

Ielasi³

2019

IJBM

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“…This kind of relationship loan, which is established by trust, usually uses 'soft information' for credit review. For example, joint-stock banks can obtain 'soft information' by asking corporate customers, enterprise suppliers, or business partners to lend to small and medium-sized enterprise, thus providing lower loan costs for small and medium-sized enterprise, therefore, such banks are more important for small and medium-sized enterprise in post-transition economies (Bartoli, Ferri, Murro, & Rotondi, 2013), however, large banks and foreign banks will not adopt 'hard information' technologies such as small business rating technology or fixed asset evaluation technology to carry out trading technical loans for small enterprises (Hasan, Jackowicz, Kowalewski, & Kozłowski, 2014). However, small mediumsized enterprise trading technical loans are not without advantages, and small medium-sized enterprise that obtain loans by means of fixed asset mortgages also have an advantage in terms of loan interest rates (Huo, Feng, & Liu, 2015).…”

Section: Small and Medium-sized Enterprise Loanmentioning

confidence: 99%

Is collective financing feasible for small and micro-sized enterprises? An evolutionary game analysis of the credit market in China

Huo

Zhu

2019

Economic Research-Ekonomska Istraživanja

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With regards to the evolutionary game model of collective financing between commercial banks and small and medium-sized enterprises (SMEs), the self-guarantee mechanism formed within the enterprise group is taken as the research background in the paper. Under the circumstances of mortgage assets and unsecured assets, the changing trend of the strategies of both sides in the process of collective financing is made a discussion respectively. Followed by the evolutionary game, it is concluded that under the stable management strategy, commercial banks will offer different loan strategies (collective or separate) after comprehensively judging the repayment probability of enterprises. For SMEs, loans at a reasonable rate can prompt them to pay them back on time, however, high loan costs can lead to the possibility of total financing default and the adverse circumstances of risk diffusion. More importantly, collective financing of unsecured assets does not increase the bank's credit risk, while not only can it help banks reduce the cost of loan review, but also alleviate the problem of information opacity in SMEs, prevent the occurrence of default risk and reduce the threshold for enterprises to obtain funds and also provide a new way to solve the financing problems of SMEs. ARTICLE HISTORY

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“…Banks can conduct a credit risk assessment, endow different credit terms for individuals, and conduct credit crisis prevention dependent on such databases (Oreski et al 2012; Agier and Szafarz 2013; Bartoli et al 2013; García et al 2013). Huda (2012) indicated that the government should construct databases of high-tech firms in order to reduce asymmetric information, and act as an agency for banks in their financial distributions to high-tech firms that lack financing.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Columba et al (2010) proposed that, while it is difficult for high-tech enterprises with a short repayment record and credit history to obtain loans from banks, their borrowing capacity may be improved by joining mutual guarantee institutions (MGIs) that have better screening and monitoring ability in borrowers. At the peak of crisis, if small firms with joined MGIs did not appear financial tensions, however, the information from MGIs which can be rating systems (Bartoli et al 2013). A well-designed government-sponsored credit guarantee scheme should consist of credit rating databases, limit the ratio of guaranteed loans to total loans, and has an affordable ceiling on total budget (Honohan 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

Evaluating the enhancement and improvement of China’s technology and financial services platform innovation strategy

Chen

2016

SpringerPlus

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The development of high-tech industry has been prosperous around the world in past decades, while technology and finance have already become the most significant issues in the information era. While high-tech firms are a major force behind a country’s economic development, it requires a lot of money for the development process, as well as the financing difficulties for its potential problems, thus, how to evaluate and establish appropriate technology and financial services platforms innovation strategy has become one of the most critical and difficult issues. Moreover, how the chosen intertwined financial environment can be optimized in order that high-tech firms financing problems can be decided has seldom been addressed. Thus, this research aims to establish a technology and financial services platform innovation strategy improvement model, as based on the hybrid MADM model, which addresses the main causal factors and amended priorities in order to strengthen ongoing planning. A DEMATEL technique, as based on Analytic Network Process, as well as modified VIKOR, will be proposed for selecting and re-configuring the aspired technology and financial services platform. An empirical study, as based on China’s technology and financial services platform innovation strategy, will be provided for verifying the effectiveness of this proposed methodology. Based on expert interviews, technology and financial services platforms innovation strategy improvement should be made in the following order: credit guarantee platform (C)_credit rating platform (B)_investment and finance platform (A).

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Bank–firm relations and the role of Mutual Guarantee Institutions at the peak of the crisis

Cited by 48 publications

References 23 publications

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

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

Is collective financing feasible for small and micro-sized enterprises? An evolutionary game analysis of the credit market in China

Evaluating the enhancement and improvement of China’s technology and financial services platform innovation strategy

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