Challenges of Public Credit Guarantee Schemes in Latin America during the Pandemic
Partial credit guarantees have been a central tool in countries’ strategies to support firms through the COVID-19 pandemic. This paper presents the results of a set of surveys covering 19 partial credit guarantees in 12 countries in the Latin Ameri...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/undefined/916081641822628029/Challenges-of-Public-Credit-Guarantee-Schemes-in-Latin-America-during-the-Pandemic http://hdl.handle.net/10986/36816 |
| Summary: | Partial credit guarantees have been a
central tool in countries’ strategies to support firms
through the COVID-19 pandemic. This paper presents the
results of a set of surveys covering 19 partial credit
guarantees in 12 countries in the Latin America region,
which were repeated at different stages of the pandemic
crisis. The paper finds that most partial credit guarantees
in the region are not large enough to foster change in the
way the local financial sectors conduct business, how they
engage with small and medium-size enterprises, and how they
assimilate climate and gender considerations. Moreover, the
response to the pandemic shows that most partial credit
guarantees in the region have made limited use of the
toolkit of parametric changes for boosting participation
among financial institutions. Finally, the paper stresses
the need for fair pricing methodologies and risk-based
capital adequacy that may ensure the long-term
sustainability of partial credit guarantee schemes. |
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