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Who benefits from government guarantees: Evidence from Saitdol loans

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  • Kim, Meeroo

Abstract

This study investigates whether Saitdol loans, a type of governmentguaranteed loan, were allocated to groups that would otherwise be unable to access the loan market without such a guarantee. To assess this, both non-parametric and parametric estimation methods, as proposed by Hendren (2013), were employed to examine the severity of information asymmetry between Saitdol loan borrowers and financial institutions, a potential cause of a market failure. The analysis results indicate that the information asymmetry between borrowers holding Saitdol loans and financial institutions was not severe enough to cause a market failure. This suggests that a significant number of Saitdol loans were allocated to borrowers who could have obtained loans from the private sector without government guarantees.

Suggested Citation

  • Kim, Meeroo, 2025. "Who benefits from government guarantees: Evidence from Saitdol loans," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 47(2), pages 37-80.
    • Handle: RePEc:zbw:kdijep:320443
    DOI: 10.23895/kdijep.2025.47.2.37
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    More about this item

    Keywords

    Government Loan Guarantees; Household Loan; Mid-rate Loan; Asymmetric Information Pension;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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