Information asymmetry in small and medium enterprise credit guarantee schemes: evidence from Japan

Saito, Kuniyoshi; Tsuruta, Daisuke

doi:10.1080/00036846.2017.1400651

Cited by 38 publications

(13 citation statements)

References 29 publications

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“…As we explained above, in the context of loans to SMEs, whether a loan is guaranteed is likely to have a significant impact on lenders' incentives. Consistent with this reasoning, findings in previous empirical studies suggest that Japan's public credit guarantees create moral hazard on the part of lenders (Ono et al 2013, Saito and Tsuruta 2014, Uesugi et al 2010.…”

Section: Related Literaturesupporting

confidence: 53%

Forgiveness versus Financing: The Determinants and Impact of SME Debt Forbearance in Japan

Ono

Yasuda

2018

SSRN Journal

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This paper empirically examines the impact of Japan's debt forbearance policies with regard to small and medium-sized enterprises (SMEs) stipulated in the "Act concerning Temporary Measures to Facilitate Financing for SMEs." Using unique Japanese firm survey data that identify firms that received "financing" (such as through the deferral of debt repayments) and firms that received "debt forgiveness" (such as through a reduction in principal and/or interest), we examine the determinants and the effects of debt forbearance to test the theoretical predictions of Krugman's (1988) "financing vs. forgiving a debt overhang" analysis. We find, first, that banks choose debt forgiveness for firms that are more creditworthy and more profitable, which is consistent with the theory of debt overhang. Second, among firms that received debt forbearance, those that had received debt forgiveness had better access to new loans and showed superior ex-post performance than those that received financing, which is also consistent with the theory of debt overhang. Third, compared to firms that had not received any debt forbearance, firms that had received financing were more leveraged and exhibited worse performance, especially those whose forborne loans were covered by public credit guarantees, while firms that had received debt forgiveness exhibited better performance, especially those without public credit guarantees. This suggests that the effectiveness of the SME forbearance policy is adversely affected by the moral hazard generated by public credit guarantee programs.

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Section: Related Literaturesupporting

confidence: 53%

Forgiveness versus Financing: The Determinants and Impact of SME Debt Forbearance in Japan

Ono

Yasuda

2018

SSRN Journal

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“…Bahkan kredit untuk petani seringnya didapat dari pasar kredit informal daripada lembaga formal karena mahalnya biaya kredit formal (Tang & Guo, 2017). Dan bisa jadi bank tidak dapat membedakan peminjam yang berisiko lemah dengan yang berisiko tinggi (Saito & Tsuruta, 2018).…”

Section: Pendahuluanunclassified

Penerapan SAK EMKM Sektor Pertanian Kabupaten Bogor Menuju Pengembangan Industri 4.0

Rusmanah¹,

Ariyanto²

2021

E-Jurnal Akuntansi

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Micro, Small, and Medium Enterprises (MSMEs) are the main drivers of the economy and dominated by the agricultural sector. However, this sector does not show a significant improvement. The main obstacle is the lack of MSME access to financing due to reliable financial reports. Financial Accounting Standards for MSMEs (SAK EMKM) were prepared to address this challenge. This study motivates to determine the perceptions of MSME of agricultural sector towards SAK EMKM. The study is done in Bogor Regency with farmers as the respondens. Descriptive analysis and Technology Acceptance Model (TAM) by Davis (1989) are combined to explain the perceptions. The results show that SAK EMKM was usefull but did not agree that it was easy to implement. Keywords: UMKM; SAK EMKM; Technology Acceptance Model.

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“…Uesugi, Sakai, and Yamashiro (2010) find that the loosening of conditions for credit guarantees in Japan during the Asian financial crisis led to significant risk shifting because banks replaced nonguaranteed loans with guaranteed ones to minimize their exposure to risky assets. Moreover, there is also some evidence that public credit guarantees tend to be associated with lower firm creditworthiness and higher defaults (Ono, Uesugi, and Yasuda 2013;de Blasio et al 2014;Saito and Tsuruta 2014), suggesting that these schemes might decrease lender incentives to adequately screen and monitor borrowers.…”

Section: Financial Sustainability and The Impact Of Public Credit Guamentioning

confidence: 99%

Innovative Experiences in Access to Finance: Market-Friendly Roles for the Visible Hand?

Torre¹,

Gozzi²,

Schmukler³

2017

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This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

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Information asymmetry in small and medium enterprise credit guarantee schemes: evidence from Japan

Cited by 38 publications

References 29 publications

Forgiveness versus Financing: The Determinants and Impact of SME Debt Forbearance in Japan

Forgiveness versus Financing: The Determinants and Impact of SME Debt Forbearance in Japan

Penerapan SAK EMKM Sektor Pertanian Kabupaten Bogor Menuju Pengembangan Industri 4.0

Innovative Experiences in Access to Finance: Market-Friendly Roles for the Visible Hand?

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