The effects of mutual guarantee consortia on the quality of bank lending
In this paper we investigate whether or not mutual guarantee consortia (MGC), a financial institution well developed in Italy, alleviate the difficulties that Small and Medium Enterprises (SMEs) face when they ask for a bank loan. We find that the probability of a small firm affiliated to a MGC of going into default is lower than that of firms not affiliated to such a consortium. These results indicate that MGCs improve the ability of banks to screen and monitor small firms.
|Date of creation:||Apr 2009|
|Date of revision:||Mar 2009|
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- Berger, Allen N. & Udell, Gregory F., 2006. "A more complete conceptual framework for SME finance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2945-2966, November.
- Francesco Columba & Leonardo Gambacorta & Paolo Emilio Mistrulli, 2009.
"Mutual guarantee institutions and small business finance,"
Temi di discussione (Economic working papers)
735, Bank of Italy, Economic Research and International Relations Area.
- 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.
- Columba, F. & Gambacorta, L. & Mistrulli, P.E., 2009. "Mutual Guarantee Institutions and Small Business Finance," Discussion Paper 2009-32 S, Tilburg University, Center for Economic Research.
- Francesco Columba & Leonardo Gambacorta & Paolo Emilio Mistrulli, 2009. "Mutual guarantee institutions and small business finance," BIS Working Papers 290, Bank for International Settlements.
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