Credit guarantee schemes and their impact on SME lending: existing literature and research gaps

Anke Valentin and Birgit Wolf

International Journal of Entrepreneurial Venturing, 2013, vol. 5, issue 4, 391-405

Abstract: Governments throughout the world have established credit guarantee schemes to mitigate credit restrictions to SMEs. The aim of those schemes is to encourage lenders to provide loans to small firms. Typically, credit guarantee schemes reduce the risk for the lender by guaranteeing to reimburse a part of the loan in case the borrower should default. This enables SMEs to get a loan that they otherwise would not have obtained. Empirical literature about whether credit guarantee schemes really help to overcome credit constraints is very scarce and existing results are rather vulnerable. This paper provides a critical overview about the current status of research and highlights existing research gaps. Based on these gaps an alternative research approach is derived. As additional research is needed to make a definite statement about the scheme's impact on lending to SMEs, adopting this approach may help to bridge the current research gap.

Keywords: credit guarantee schemes; German Guarantee Banks; guarantees; SME lending; credit rationing; market imperfections; literature review; Germany; SMEs; small and medium-sized enterprises; SME loans; SME credit; SME funding. (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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