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Access by MSMEs to Finance in the Southern and Eastern Mediterranean: What role for credit guarantee schemes?

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  • Ayadi, Rym
  • Gadi, Salim

Abstract

Micro-, small- and medium-sized enterprises (MSMEs) in the Southern and Eastern Mediterranean suffer from credit constraints. Given their contribution to employment and growth, similarly as in other regions, policy-makers have developed credit guarantee schemes (CGSs) in order to facilitate small companies’ access to debt capital. CGSs are risk-sharing mechanisms under which a guarantor ensures the lender against a share of the possible losses it incurs when extending a loan. Despite the maturity of some schemes, knowledge of the schemes’ functioning, operating environment as well as performance in guaranteeing loans for MSMEs is scarce. Building on a previous study of CGSs in the region, this paper extends the available knowledge on the region’s schemes, building on the results of an exclusive questionnaire to gain insights into these mechanisms. First, the paper reviews the conditions of MSMEs’ access to finance in the Southern and Eastern Mediterranean; second, it presents the results of the questionnaire across a number of dimensions ranging from ownership to financial performance; and third, the paper presents some avenues for future policy research in this area.

Suggested Citation

  • Ayadi, Rym & Gadi, Salim, 2013. "Access by MSMEs to Finance in the Southern and Eastern Mediterranean: What role for credit guarantee schemes?," CEPS Papers 8061, Centre for European Policy Studies.
  • Handle: RePEc:eps:cepswp:8061
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    File URL: http://www.ceps.eu/system/files/MEDPRO%20TP%20No%2035%20RA%20%2526%20SG%20MSME%20Access%20to%20Finance.pdf
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    References listed on IDEAS

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    1. Honohan, Patrick, 2010. "Partial credit guarantees: Principles and practice," Journal of Financial Stability, Elsevier, vol. 6(1), pages 1-9, April.
    2. Barth,James R. & Caprio,Gerard & Levine,Ross, 2008. "Rethinking Bank Regulation," Cambridge Books, Cambridge University Press, number 9780521709309.
    3. AfDB AfDB, . "AfDB Group Annual Report 2009 (Arabic)," Annual Report, African Development Bank, number 68 edited by Koua Louis Kouakou.
    4. Inha Oh & Jeong-Dong Lee & Almas Heshmati & Gyoung-Gyu Choi, 2009. "Evaluation of credit guarantee policy using propensity score matching," Small Business Economics, Springer, vol. 33(3), pages 335-351, October.
    5. AfDB AfDB, . "AfDB Group Annual Report 2009," Annual Report, African Development Bank, number 66 edited by Koua Louis Kouakou.
    6. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    7. Claire Lelarge & David Sraer & David Thesmar, 2010. "Entrepreneurship and Credit Constraints: Evidence from a French Loan Guarantee Program," NBER Chapters,in: International Differences in Entrepreneurship, pages 243-273 National Bureau of Economic Research, Inc.
    8. AfDB AfDB, . "AfDB Group Annual Report in Brief 2009," Annual Report, African Development Bank, number 65 edited by Koua Louis Kouakou.
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    Cited by:

    1. Ayadi, Rym & De Groen, Willem Pieter, 2014. "Micro-, Small- and Medium-Sized Enterprises with High-Growth Potential in the Southern Mediterranean: Identifying Obstacles and Policy Responses," CEPS Papers 8796, Centre for European Policy Studies.
    2. Bahar Öztürk & Mico Mrkaic, 2014. "SMEs’ Access to Finance in the Euro Area; What Helps or Hampers?," IMF Working Papers 14/78, International Monetary Fund.
    3. Ayadi, Rym, 2013. "Financial Sector Development and Integration in the Southern and Eastern Mediterranean: Towards a long-term sustainable transition," CEPS Papers 7936, Centre for European Policy Studies.
    4. Brian Micallef, 2016. "The Adjustment of Maltese Firms to the Post-crisis Economic Environment: Evidence from a Firm-level Survey," International Business Research, Canadian Center of Science and Education, vol. 9(9), pages 122-133, September.

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