Credit Guarantee Scheme and Startup Businesses: Financial Pipelines and Successful Startups in South East Asia

Youngho Chang () and Wai Mun Kock

Chapter 9 in Investment in Startups and Small Business Financing, 2021, pp 265-302 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Disruption to the traditional businesses have highlighted the importance of startups to the economic well-being of a country. Numerous studies have shown that startups contribute positively to various economic indicators including job creation, economic growth, and improved productivity. Despite the obvious benefits successful startups can bring to the economy, they are not able to obtain sufficient funding persistently which is crucial for startups to grow. This persistent funding gap is often attributed to lack of collateral and asymmetric information on the viability of the products and startups. As a result, many startups could have stagnated as small and medium enterprises (SMEs). This is especially true in South East Asia. Credit guarantee schemes (CGS) could potentially reduce this funding gap to help startups grow. This chapter seeks to review the experiences of four very diverse CGS for comparative studies. These four CGS had contributed to the dynamic growth of the economies which were badly decimated in the Second World War. This chapter also takes stock of the existing CGS in various Southeast Asian countries and seeks to draw valuable lessons for policy implementation from the four CGS.

Keywords: Small and Medium-Sized Enterprises; SMEs; Startups; Finance; SME Finance; Corporate Finance; Micro-Finance; Risky Businesses; Asymmetry of information; Investment; Venture Capital; Credit Guarantee; Credit Guarantee Fund; Credit Guarantee Corporation; Credit Guarantee Scheme; Korea Credit Guarantee Fund; KODIT; Small Businesses; Hometown Investment Trust Fund; HIT Funds Techno-Economic Feasibility Study; Tech Startup; Soft Infrastructure; Startup Ecosystem; Credit Guarantee Premium Rate; Regulatory Frameworks; Leveraging; Asia; East Asia; South East Asia; ASEAN; South Asia; Central Asia; Iran; Kazakhstan; Malaysia; Japan; Thailand; Naoyuki Yoshino; Farhad Taghizadeh-Hesary; Peter Morgan; Chul Ju Kim; Daehee Yoon; Islamic Banking; Islamic; Finance; The Fourth Industrial Revolution; Damu Fund; Inclusive Growth; Financial Inclusion (search for similar items in EconPapers)
JEL-codes: G3 O1 O16 (search for similar items in EconPapers)
Date: 2021
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