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 market...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| 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 http://hdl.handle.net/10986/23329 |
| Summary: | 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. |
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