An Analysis of Credit Guarantee Schemes: Suggestions Provided by Literature

Ida Panetta ()

Chapter 2 in Credit Guarantee Institutions and SME Finance, 2012, pp 11-37 from Palgrave Macmillan

Abstract: Abstract Micro, small and medium enterprises are the most widespread organizational form in the business world, accounting for an average of 90 to 99 per cent (OECD, 2006, p. 34) of firms. Such is the contribution of SMEs to the development of the economy, in terms of both employment ensured and GDP produced, that they are frequently considered the backbone of the economy.1 However, a lack of formal credit often hinders small firms from developing their potential. In fact, even in situations where loan and equity finance are plentiful and legal structures are well established,2 it is widely recognized that SMEs often have limited access3 to institutional financing. For this reason, various governments all around the world implement initiatives to support small and medium enterprises’4 development, including measures to facilitate financing.

Keywords: Interest Rate; Small Firm; Moral Hazard; Default Rate; Financial Sustainability (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-36232-1_2

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DOI: 10.1057/9780230362321_2

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