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The role of loan and guarantee funds in filling the funding gap for Small and Medium-sized Enterprises

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  • Waniak-Michalak Halina

    (University of Lodz, Faculty of Management, Department of Accounting, Poland)

Abstract

Research background. The analysis of the funding gap for SMEs and loan and guarantee funds’ capability to fill this gap has been undertaken to assess the instruments used in Poland which are focused on the development of entrepreneurship.Methodology/methods. The funding gap for small and medium-sized enterprises is measured with the method of unfulfilled demand for funding and unawarded funding. The size of the gap is compared to the potential amount of the guarantees and loans granted by non-bank organisations in Poland dependent on the amount of capital held.Purpose of the article. The purpose of the article is to answer the research question of whether guarantee and loan funds in Poland play a significant role in filling the funding gap for small and medium-sized enterprisesFindings & Value added Guarantee and loan funds are not able to fill the equity gap of SMEs in Poland due to low capital resources compared with needs, and an insufficient number of institutions offering non-bank funding. Also, the high risk attributed to loans granted to small and medium-sized entrepreneurs influences the low degree of utilisation of the capital already held, both by loan and guarantee funds. The unutilised capital is deposited in bank accounts and does not lead to the increase of the multiplier effect. The analysis concerns the specificity of the support system for SMEs in Poland and cannot be generalised to systems in other countries. However, the conclusions from the conducted analysis and the methodology of calculation of the equity gap may serve other researchers as a basis for creating their own theses and research hypotheses.

Suggested Citation

  • Waniak-Michalak Halina, 2017. "The role of loan and guarantee funds in filling the funding gap for Small and Medium-sized Enterprises," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 13(4), pages 127-135, December.
    • Handle: RePEc:vrs:finiqu:v:13:y:2017:i:4:p:127-135:n:5
    DOI: 10.1515/fiqf-2016-0041
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    References listed on IDEAS

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    3. Keasey, Kevin & Watson, Robert, 1994. "The Bank Financing of Small Firms in UK: Issues and Evidence," Small Business Economics, Springer, vol. 6(5), pages 349-362, October.
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    More about this item

    Keywords

    small and medium-sized enterprises; loan; guarantee; funds; financing;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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