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Partial credit guarantees and SMEs financing

Author

Listed:
  • Boschi, Melisso
  • Girardi, Alessandro
  • Ventura, Marco

Abstract

Using data for the Italian Central Guarantee Fund for Small and Medium Enterprises, the paper analyses the effect of partial credit guarantees on firms’ financing. We show that neglecting heterogeneity in guarantee intensities, namely considering all firms as equally treated, leads to a mis-measurement of the additionality effect. Moreover, we document the existence of non-linear effects, suggesting that coverage ratios below a certain threshold are likely to be ineffective to lessen obstacles faced by firms when seeking external financing funds.

Suggested Citation

  • Boschi, Melisso & Girardi, Alessandro & Ventura, Marco, 2014. "Partial credit guarantees and SMEs financing," Journal of Financial Stability, Elsevier, vol. 15(C), pages 182-194.
    • Handle: RePEc:eee:finsta:v:15:y:2014:i:c:p:182-194
    DOI: 10.1016/j.jfs.2014.09.007
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    More about this item

    Keywords

    Credit guarantees; Credit rationing; Additionality; SME; Italy;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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