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Public guarantees on loans to SMEs: an RDD evaluation

Author

Listed:
  • Guido de Blasio

    () (Bank of Italy)

  • Stefania De Mitri

    () (Bank of Italy)

  • Alessio D'Ignazio

    () (Bank of Italy)

  • Paolo Finaldi Russo

    () (Bank of Italy)

  • Lavina Stoppani

    () (Catholic University of Milan)

Abstract

The paper evaluates the impact of the guarantees provided by the Italian scheme Fondo di Garanzia on the access to credit for small and medium enterprises. The study exploits the mechanism that assigns the guarantees, which is based on a scoring system to assess eligibility. By using regression discontinuity techniques, the paper finds that at the threshold between eligible and non-eligible firms, the program has a positive impact on bank loans to firms; however, the scheme has no impact on the interest rate charged by the banks, while it affects positively the likelihood that a firm becomes unable to repay its loans. The guaranteed loans were mostly used to finance working capital. Finally, the paper provides inference for far-from-the-threshold firms.

Suggested Citation

  • Guido de Blasio & Stefania De Mitri & Alessio D'Ignazio & Paolo Finaldi Russo & Lavina Stoppani, 2017. "Public guarantees on loans to SMEs: an RDD evaluation," Temi di discussione (Economic working papers) 1111, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1111_17
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2017/2017-1111/en_tema_1111.pdf
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    References listed on IDEAS

    as
    1. Beck, Thorsten & Klapper, Leora F. & Mendoza, Juan Carlos, 2010. "The typology of partial credit guarantee funds around the world," Journal of Financial Stability, Elsevier, vol. 6(1), pages 10-25, April.
    2. Salvatore Zecchini & Marco Ventura, 2009. "The impact of public guarantees on credit to SMEs," Small Business Economics, Springer, vol. 32(2), pages 191-206, February.
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    More about this item

    Keywords

    credit guarantees; public guarantees; access to credit; SMEs financing;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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