Purpose: The purpose of this paper is to focus on public guarantees granted to micro-, small- and medium-sized enterprises (SMEs) by the Italian national credit guarantee programme (Fondo Centrale di Garanzia – Central Guarantee Fund – (CGF)). The CGF provides a direct guarantee to banks granting loans or a counter-guarantee to mutual guarantee institutions (MGIs) acting as first-level guarantors. Because the behaviour of MGIs could affect the default risk of counter-guaranteed loans, it is vital to investigate their operating and structural characteristics in order to identify an optimal design for public credit guarantee schemes (PCGSs). Design/methodology/approach: Using regression models, the paper analyses the determinants of default for 33,229 SME loans guaranteed by an MGI and counter-guaranteed by the Italian CGF. The dependent variable is the ex-post default risk of SMEs’ counter-guaranteed loans in the 2010-2011 period. The explanatory variables are certain characteristics of the MGI. Findings: The authors demonstrate that increases in an MGI’s leverage and the size of the counter-guaranteed portfolios increase the default risk. When the counter-guaranteed portfolio increases, MGIs are more risk taking but take less risk than when local and specialized MGIs are at play. Finally, direct public aid is relevant. Practical implications: An appropriate design of the PCGS becomes crucial to controlling moral hazard in financial institutions and ensuring the financial sustainability of public intervention in favour of SMEs. Originality/value: The paper evaluates an original and confidential firm-level data set that is not available in public documents or supervisory board statistics but is collected directly from the MGIs that participated in this study.
Gai, L., Ielasi, F., & Rossolini, M. (2016). SMEs, public credit guarantees and mutual guarantee institutions. JOURNAL OF SMALL BUSINESS AND ENTERPRISE DEVELOPMENT, 23(4), 1208-1228.
|Citazione:||Gai, L., Ielasi, F., & Rossolini, M. (2016). SMEs, public credit guarantees and mutual guarantee institutions. JOURNAL OF SMALL BUSINESS AND ENTERPRISE DEVELOPMENT, 23(4), 1208-1228.|
|Tipo:||Articolo in rivista - Articolo scientifico|
|Carattere della pubblicazione:||Scientifica|
|Presenza di un coautore afferente ad Istituzioni straniere:||No|
|Titolo:||SMEs, public credit guarantees and mutual guarantee institutions|
|Autori:||Gai, L; Ielasi, F; Rossolini, M|
ROSSOLINI, MONICA (Corresponding)
|Data di pubblicazione:||2016|
|Rivista:||JOURNAL OF SMALL BUSINESS AND ENTERPRISE DEVELOPMENT|
|Digital Object Identifier (DOI):||http://dx.doi.org/10.1108/JSBED-03-2016-0046|
|Appare nelle tipologie:||01 - Articolo su rivista|