Public guarantees to SME borrowing. A RDD evaluation

Blasio, Guido de; Mitri, Stefania De; D’Ignazio, Alessio; Russo, Paolo Finaldi; Stoppani, Lavinia

doi:10.1016/j.jbankfin.2018.08.003

Cited by 58 publications

(25 citation statements)

References 20 publications

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“…EUR) in total, since the loans and guarantees have been organized within the partnerships with other market based financial institutions. Obtained results from the evaluation may be used as a support material for the future policy adjustments, and as a retrospective feedback for the local policy representatives [106][107][108]. The empirical analysis was conducted on the firm level and investigated changes in the financial performance of the supported firms in comparison with other non-supported firms.…”

Section: Discussionmentioning

confidence: 99%

“…The highest share of the projects was supported in 2008 and the last projects were supported in 2010. The majority of the supported were self-employed/freelances (107), and the rest of them represented a business company. From the projects supported by the credit guarantees, the most frequent project was the construction of the photovoltaic power plants, and out of the projects that were supported by the zero interest soft loans, it was the foundation of a store.…”

Section: Public Programme Startmentioning

confidence: 99%

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Effects of Soft Loans and Credit Guarantees on Performance of Supported Firms: Evidence from the Czech Public Programme START

Dvouletý

2017

Sustainability

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Abstract:The purpose of this article was to conduct an empirical evaluation of the Czech public programme START, which was funded from the European Regional Development Fund. The programme lasted from 2007-2011, and supported new entrepreneurs through the zero interest soft loans and credit guarantees. The counterfactual analysis (using three matching techniques: propensity score, nearest neighbour, and kernel) was conducted on the firm level and investigated the changes in financial performance (net profits, return on assets (ROA), return on equity (ROE), sales, assets turnover, and debt ratio) of the supported firms four years after the end of intervention. The obtained findings could not support the hypothesis assuming a positive impact of the programme on the firm's performance. On the contrary, supported companies reported on average lower sales and lower return on assets, when compared to the control group. The remaining variables could not prove any statistically significant impact of the programme. Indicators measuring firm's profitability (net profit, return on assets, and return on equity) suggested a negative influence of the programme and the variable representing debt ratio further indicated that firms that were supported by the programme reported on average higher debt ratio in comparison with the control group. Several policy implications are discussed in the study.

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Section: Discussionmentioning

confidence: 99%

Section: Public Programme Startmentioning

confidence: 99%

Effects of Soft Loans and Credit Guarantees on Performance of Supported Firms: Evidence from the Czech Public Programme START

Dvouletý

2017

Sustainability

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“…Most of the existing studies provide evidence of the financial additionality of credit guarantee schemes, typically in the form of better conditions in accessing credit, such as higher loan volumes, lower interest rates, and/or longer maturities. For instance, Zecchini and Ventura (2009) and de Blasio et al (2014) find that Italy's Fondo di Garanzia increased lending to SMEs. Similar evidence of financial additionality has been found for the Small Business Financing Program in Canada (Riding, Madill, and Haines 2007), the National Guarantee Fund in Colombia (Castillo Bonilla and Giron 2014), SOFARIS (Société française de garantie des financements des petites et moyennes entreprises) in France (Lelarge, Sraer, and Thesmar 2010), the Special Credit Guarantee Program in Japan (Wilcox and Yasuda 2008;Uesugi, Sakai, and Yamashiro 2010), the Small Firms Loan Guarantee in the United Kingdom, and the U.S. Small Business Administration (Hancock, Peek, and Wilcox 2007), among others.…”

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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“…They also apply IVs to find that the guarantee resulted in a greater amount of bank loans being granted to the firms; however, this effect was rather small in size. de Blasio et al (2017) evaluate the impact of the guarantees provided by the Italian Fondo di garanzia (Guarantee Fund). Their results, based on a fuzzy-regression discontinuity design (F-RDD) strategy, indicate that the program had a relevant impact on the amount of bank loans, while no effect was detected on the interest rate and on firm investments.…”

Section: Introductionmentioning

confidence: 99%

Causal Effect of Credit Guarantees for Small‐ and Medium‐Sized Enterprises: Evidence from Italy

D’Ignazio

Menon

2019

Scandinavian J Economics

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We evaluate the effectiveness of a partial credit guarantee program, implemented in a large Italian region, that aimed to improve the access to credit of small and medium enterprises. Using unique microdata from a broad set of firms, we show that the policy increased the long‐term loans for beneficiary firms, while the total volume of bank loans was unaffected. Furthermore, targeted firms benefited from a substantial decrease in interest rates. However, there is some evidence that firms are more likely to default as a consequence of the treatment. Conversely, the results do not point to any significant effect on investments.

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Public guarantees to SME borrowing. A RDD evaluation

Cited by 58 publications

References 20 publications

Effects of Soft Loans and Credit Guarantees on Performance of Supported Firms: Evidence from the Czech Public Programme START

Effects of Soft Loans and Credit Guarantees on Performance of Supported Firms: Evidence from the Czech Public Programme START

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

Causal Effect of Credit Guarantees for Small‐ and Medium‐Sized Enterprises: Evidence from Italy

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