Credit Guarantee Schemes According to Caselli

Stefano Caselli, Department of Finance, was one of the keynote speakers, yesterday in Paris, at the OECD Workshop on Policies for SME and Entrepreneurship Finance. He introduced the Credit Guarantee Schemes: Are They an Effective Tool to Improve Access to Finance For SMEs? session in front of government delegates from 60 countries, financial sector and enterprise development experts, policy makers and enterprise associations' representatives.

"Barriers to access to finance by SMEs and entrepreneurs are a persistent constraint to economic growth and job creation, and have been exacerbated by the recent global financial and economic crisis", is the way OECD explained the workshop rationale. "A rich variety of government policy initiatives to influence finance supply, demand and intermediation are in place around the world, with the aim of relieving the finance constraint to SMEs and entrepreneurs. Through these schemes, governments are seeking effective and efficient approaches that minimise problems of distortion and crowding out in financial markets and achieve appropriate risk levels for the private and public sector".

Credit Guarantee Schemes (CGS) are one of these tools. They can be set up under different configurations (mutual schemes, public funded institutions, hybrid institutions combining public and private funding) and operate under very different framework conditions.

Caselli dealt with the new challenges facing CGSs, namely the need for more professional competence in the mutual schemes and the need for a guarantees diversification in order to foster SMEs' equity financing and to encompass trade finance, leasing and long-term financing.