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SMEs finance and bankruptcies: The role of credit guarantee schemes in the UK

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  • Paolo Agnese
  • Manuel Rizzo
  • Gianfranco A. Vento

Abstract

With reference to consideration on the future of credit guarantees in the world, it may be interesting to analyze the UK framework of guarantee schemes in favour of SMEs, where there are no private guarantee providers and where there is a substantial public monopoly. In particular, in this paper it emerges that among the countries examined by the OECD, the country where the credit guarantees are least widespread is the United Kingdom. However, the trend in bankruptcies recorded in recent years by British firms is better than the median of the other countries considered. Results from the regression analysis show that among years of operation where EFG has been introduced, possibly this kind of government loan guarantees scheme for SMEs played a minor role, compared to macroeconomic indicators as GDP, in dealing with SMEs bankruptcies.JEL classification numbers: G21, G28, G29Keywords: Guarantee schemes, Credit, Bankruptcies.

Suggested Citation

  • Paolo Agnese & Manuel Rizzo & Gianfranco A. Vento, 2018. "SMEs finance and bankruptcies: The role of credit guarantee schemes in the UK," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 8(3), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:8:y:2018:i:3:f:8_3_1
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    References listed on IDEAS

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    1. Koopman, Siem Jan & Kräussl, Roman & Lucas, André & Monteiro, André B., 2009. "Credit cycles and macro fundamentals," Journal of Empirical Finance, Elsevier, vol. 16(1), pages 42-54, January.
    2. Cowling, Marc, 2010. "The role of loan guarantee schemes in alleviating credit rationing in the UK," Journal of Financial Stability, Elsevier, vol. 6(1), pages 36-44, April.
    3. Berger, Allen N. & Udell, Gregory F., 2006. "A more complete conceptual framework for SME finance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2945-2966, November.
    4. Paola Leone & Gianfranco A. Vento (ed.), 2012. "Credit Guarantee Institutions and SME Finance," Palgrave Macmillan Studies in Banking and Financial Institutions, Palgrave Macmillan, number 978-0-230-36232-1.
    5. Paolo Agnese & Gianfranco A. Vento, 2011. "Guarantee institutions and credit to Smes:mutual guarantee societies in Argentina," BANCARIA, Bancaria Editrice, vol. 1, pages 112-126, January.
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    Cited by:

    1. Pankaj C. Patel & Mike G. Tsionas, 2022. "Learning‐by‐lending and learning‐by‐repaying: A two‐sided learning model for defaults on Small Business Administration loans," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 906-919, June.
    2. Soonae Park & In Hyeock Lee & Jung Eun Kim, 2020. "Government support and small- and medium-sized enterprise (SME) performance: the moderating effects of diagnostic and support services," Asian Business & Management, Palgrave Macmillan, vol. 19(2), pages 213-238, April.

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    More about this item

    Keywords

    guarantee schemes; credit; bankruptcies.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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