The Effect of Credit Guarantees on Credit Availability and Delinquency Rates

Cowan, Kevin; Drexler, Alejandro; Yañez, Álvaro

doi:10.2139/ssrn.2144343

Cited by 2 publications

(2 citation statements)

References 27 publications

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“…Using firm‐level data from the UK, Cowling (2010) compares the capital constraints faced by smaller firms with and without an available guarantee scheme and finds support for the notion that programs which provide loan security relax the financial constraint for small businesses. Similar positive effects of opening up credit access for SMEs are also found in other OECD countries, including Italy (Zecchini and Ventura, 2009), Canada (Riding et al ., 2007), Korea (Kang & Heshmati, 2008), Spain (Garcia‐Tabuenca & Crespo‐Espert, 2010), France (Lelarge et al ., 2010) and Chile (Cowan et al ., 2015).…”

Section: A Policy Viewmentioning

confidence: 99%

Financial Constraints and Small and Medium Enterprises: A Review*

et al. 2020

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We review the literature on financial constraints and the performance of small and medium enterprises (SMEs). We consider the important role that SMEs play in the economies of Australia and the OECD. We examine the role of financial constraints in SME growth, with emphasis on business cycles and credit access. We discuss issues that SMEs face in accessing financial resources for expansion. We look at the literature that evaluates the impact of financial constraints on key outcomes: employment, productivity and wages. We review key policy debates and consider where government involvement might be appropriate.

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Section: A Policy Viewmentioning

confidence: 99%

Financial Constraints and Small and Medium Enterprises: A Review*

et al. 2020

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“…There have been few rigorous impact assessments of partial credit guarantees, though the few that have been undertaken point to a somewhat positive effect, as that by Lelarge, Sraer, and Thesmar (2010) in the case of the French credit guarantee scheme. Two separate studies suggest that the Chilean scheme FOGAPE has generated additional loans for new and existing bank clients and that the additional loans have led to higher sales and profit growth (Cowan, Drexler, and Yañez, 2008; Larrain and Quiroz, 2006). However, another study questions the additionality effect as approximately 80 per cent of the firms that benefit from the guarantees have had bank loans in the past (Benavente, Galetovic, and Sanhueza, 2006).…”

Section: Differentiating Between Different Policy Levers – the Access Possibilities Frontiermentioning

confidence: 99%

Bank Financing for SMEs – Lessons from the Literature

Beck

2013

Natl. Inst. econ. rev.

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This is the accepted version of the paper.This version of the publication may differ from the final published version. Abstract: This paper surveys the recent literature on the relationship between SMEs, financial deepening and economic development. While a large SME sector is not associated with faster economic growth or poverty alleviation, financial deepening can have a progrowth and pro-poor impact by disproportionally alleviating SMEs' financing constraints, enabling new entry of firms and entrepreneurs, and better resource allocation. It is important to differentiate between different segments of the SME population, most critically between subsistence micro entrepreneurs and transformational entrepreneurs. There is strong evidence that long-term institution building, including contractual and information frameworks, contribute to easing SMEs' financing constraints, with supportive evidence for specific policy interventions. There is no unambiguous evidence on the relationship between market structure and SMEs' access to finance. Foreign-owned and larger banks are as likely to cater to SMEs as smaller and local banks, but using different lending techniques and where the necessary institutional framework is in place in the country. There is also evidence that SMEs are more strongly affected by banking crises and that regulatory policies have important repercussions for SME lending. Permanent repository link:

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The Effect of Credit Guarantees on Credit Availability and Delinquency Rates

Cited by 2 publications

References 27 publications

Financial Constraints and Small and Medium Enterprises: A Review*

Financial Constraints and Small and Medium Enterprises: A Review*

Bank Financing for SMEs – Lessons from the Literature

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