Principles for Public Credit Guarantee Schemes for SMEs

Access to finance, particularly credit, is widely recognized as problematic for small and medium enterprises (SMEs), hampering their growth and development. To address this challenge, many governments around the world intervene in SME credit markets through credit guarantee schemes (CGSs). A CGS offers risk mitigation to lenders by taking a share of the lenders’ losses on SME loans in case of default. CGSs can contribute to expand access to finance for SMEs. Yet they may bring limited value added and prove costly if they are not designed and implemented well. There have been efforts in recent years to identify good practices for CGSs, but the international community still lacks a common set of principles or standards that can help governments establish, operate, and evaluate CGSs for SMEs. The Principles for Public Credit Guarantees for SMEs are filling this gap. The Principles provide a generally accepted set of good practices, which can serve as a global reference for the design, execution, and evaluation of public CGSs around the world. The Principles propose appropriate governance and risk management arrangements, as well as operational conduct rules for CGSs, which can lead to improved outreach and additionality along with financial sustainability. Developed through extensive consultations with stakeholders, the Principles draw from both the literature on good practices for CGSs and sound practices implemented by a number of successful CGSs around the world.

Bibliographic Details

Main Author:	World Bank Group
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-12
Subjects:	BUSINESS ACTIVITIES, LINE OF CREDIT, CREDIT MARKETS, DEPOSIT, FINANCIAL SERVICES, BORROWER, ECONOMIC GROWTH, ENTERPRISE DEVELOPMENT, PEOPLE, PROPERTY LAWS, FINANCING, MARKET DEVELOPMENTS, BALANCE-SHEET, INFORMATION TECHNOLOGY, INTEREST, RISK-BASED PRICING, GUARANTEES, CREDIT CRUNCH, FINANCIAL RESOURCES, ETHNIC GROUPS, SMALL BUSINESS FINANCE, BANKING SYSTEMS, CAPITAL STRUCTURE, LIQUIDITY RISK, WELFARE, CAPITAL ADEQUACY, ENDOWMENTS, ENTREPRENEURSHIP FINANCING, FINANCIAL DIFFICULTY, LOAN, CREDIT ALLOCATION, LOAN AMOUNT, FEE, BORROWERS, SUBSIDY, PRIVATE PROPERTY, PAYMENTS, BANKRUPTCY, DEVELOPMENT FINANCE INSTITUTIONS, INFORMATION SYSTEMS, INTERNATIONAL BANK, CREDITOR, COST OF CREDIT, DEVELOPMENT FINANCE INSTITUTION, INFORMATION ASYMMETRIES, PROVISION OF CREDIT, LENDER, AGRICULTURE ORGANIZATION, CAPITAL FINANCE, FUNDING SOURCES, PUBLIC CREDIT, ACCESS TO FINANCIAL SERVICES, SMALL BUSINESS, INTERNATIONAL FINANCE, FINANCIAL SECTOR REFORM, PUBLIC POLICY, FINANCIAL SUSTAINABILITY, TECHNICAL ASSISTANCE, MORAL HAZARD, PARTIAL CREDIT, UNION, BANKERS’ ASSOCIATIONS, CONFIDENCE OF LENDERS, MAILING ADDRESS, PAYMENT, FINANCIAL INSTITUTIONS, DEBT, FISCAL RESOURCES, CAPITAL REQUIREMENTS, ELIGIBILITY CRITERIA, DEPOSIT INSURANCE, LENDERS, BANKERS, LOANS, ENTERPRISES, FINANCIAL SYSTEM, BANK FINANCING, FINANCE, TERM CREDIT, EQUITABLE TREATMENT, BANKS, SMALL LOANS, INSTITUTIONAL REFORMS, COLLATERAL REQUIREMENTS, EQUITY, CREDIT GAP, LOAN GUARANTEE, CREDIT REGISTRIES, BUSINESS FINANCE, CAPITAL, OPERATING COSTS, SMALL ENTERPRISES, FINANCIAL OBLIGATIONS, CREDIT ACCESS, ACCESS TO FINANCE, BUSINESS DEVELOPMENT, SUPPLY OF CREDIT, DEVELOPMENT BANKS, BANK, CREDIT, LEGAL AUTHORITY, INVESTMENT BANK, LOAN GUARANTEES, WORKING CAPITAL, REPAYMENT, ENTERPRISE, PROPERTY, JOB CREATION, INSTITUTIONAL CAPACITY, BALANCE SHEET, TRANSACTION COSTS, CREDIT GUARANTEE, GUARANTEE SCHEMES, CREDIT FLOWS, CC, PROFITABILITY, INSTITUTIONAL REFORM, CREDIT RISK, ACCESS TO CREDIT, ECONOMIC DEVELOPMENT, INTERESTS, FINANCIAL SECTOR ASSESSMENT, FINANCIAL ” POLICY, ECONOMIES OF SCALE, FINANCIAL DEVELOPMENT, LOAN APPLICATIONS, INVESTMENT, CREDIT GUARANTEES, EXTREME POVERTY, FINANCIAL INTERMEDIARIES, BUSINESS VOLUMES, COLLATERAL, LOAN SIZE, FINANCIAL REGULATOR, DEVELOPMENT FINANCE, LEGAL REQUIREMENTS, INVESTMENTS, BORROWING, FINANCIAL SUPPORT, RISK MANAGEMENT, BANKING SUPERVISION, FEES, WOMEN, OUTREACH, FISCAL SUPPORT, SMALL BUSINESSES, GUARANTEE, CONSUMER PROTECTION, CASH FLOW, DEVELOPMENT BANK, FINANCIAL SECTOR DEVELOPMENT, SMALL BUSINESS ADMINISTRATION, RISK MITIGATION, START-UPS, GOVERNMENT INTERVENTION, EMPLOYEES,
Online Access:	http://documents.worldbank.org/curated/en/2015/12/25665897/task-force-design-implementation-evaluation-public-credit-guarantee-schemes-small-medium-enterprises-principles-public-credit-guarantee-schemes-smes https://hdl.handle.net/10986/23329
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