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Mutual Guarantee Institutions (MGIs) and small business credit during the crisis

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Author Info

  • Paolo Emilio Mistrulli

    ()
    (Banca d'Italia)

  • Valerio Vacca

    ()
    (Banca d'Italia)

  • Gennaro Corbisiero

    ()
    (Banca d'Italia)

  • Silvia del Prete

    ()
    (Banca d'Italia)

  • Luciano Esposito

    ()
    (Banca d'Italia)

  • Marco Gallo

    ()
    (Banca d'Italia)

  • Mariano Graziano

    ()
    (Banca d'Italia)

  • Maurizio Lozzi

    ()
    (Banca d'Italia)

  • Vincenzo Maffione

    ()
    (Banca d'Italia)

  • Daniele Marangoni

    ()
    (Banca d'Italia)

  • Andrea Migliardi

    ()
    (Banca d'Italia)

  • Alessandro Tosoni

    ()
    (Banca d'Italia)

Abstract

The recent economic and financial crisis has drawn attention to how mutual guarantee institutions (MGIs) facilitate small and medium enterprises in accessing bank financing. The aim of this paper is twofold. First, we describe the structural features of the Italian market for mutual guarantees and its significance for small business credit. To this end, we use extensive databases (the Central Credit Register and the Central Balance Sheet Register) as well as specific surveys, which allow us to fill information gaps about this industry and to quantify regional diversity. Second, we investigate whether MGIs’ support to small firms continued to be effective in 2008-09, when credit constraints to Italian firms peaked. We find that MGIs played a role in avoiding a break-up in credit flows to affiliated firms, which also benefited from a lower cost of credit. However, this came at the cost of a deterioration in credit quality, which was more intense for customers with guarantees from MGIs.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Questioni di Economia e Finanza (Occasional Papers) with number 105.

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Date of creation: Oct 2011
Date of revision:
Handle: RePEc:bdi:opques:qef_105_11

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Postal: Via Nazionale, 91 - 00184 Roma
Web page: http://www.bancaditalia.it
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Related research

Keywords: microfinance; peer monitoring; small business finance;

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References

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Citations

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Cited by:
  1. Alessio D'Ignazio & Carlo Menon, 2012. "The Causal Effect of Credit Guarantees for SMEs: Evidence from Italy," SERC Discussion Papers 0123, Spatial Economics Research Centre, LSE.
  2. Edda Zoli, 2013. "Italian Sovereign Spreads: Their Determinants and Pass-through to Bank Funding Costs and Lending Conditions," IMF Working Papers 13/84, International Monetary Fund.

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