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

  • 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)

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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File URL: http://www.bancaditalia.it/pubblicazioni/qef/2011-0105/QEF_105.pdf
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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
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Handle: RePEc:bdi:opques:qef_105_11
Contact details of provider: Postal: Via Nazionale, 91 - 00184 Roma
Web page: http://www.bancaditalia.it

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  1. Columba, Francesco & Gambacorta, Leonardo & Mistrulli, Paolo Emilio, 2010. "Mutual guarantee institutions and small business finance," Journal of Financial Stability, Elsevier, vol. 6(1), pages 45-54, April.
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