Evaluating publicly supported credit guarantee programmes for SMEs

Small and medium-sized enterprises (SME) are considered as facing difficulties in accessing finance and numerous public support programmes to facilitate such access exist. This report synthesises the responses received to the “OECD/EC Survey on Evaluating Publicly Supported Financial Guarantee Programmes for SME” (henceforth referred to as the OECD/EC survey) on the approaches adopted in OECD/EU countries to evaluate the performance and cost-effectiveness of their publicly supported credit guarantee programmes for SME. The report also complements the synthesis of self-assessments by findings from a review of an emerging literature, mostly academic, that undertakes evaluations of the performance of publicly supported credit guarantee schemes (CGS). The literature provides evidence that credit guarantees are positive for firm access to debt finance, i.e. the arrangements provide financial additionality by increasing the availability of credit and/or reducing its costs. Less is known about financial sustainability of these programmes. As regards economic additionality results are mixed, with some evidence that CGS have positive effects on employment levels, while there is generally a lack of evidence for improved firm performance in terms of investments and productivity. Some studies suggest that loan guarantees are associated with increased default risk of beneficiary firms. The responses to the OECD/EC survey highlight that there is a wide range of different approaches across CGS and across countries. Several evaluations are conducted using rigorous state-of-the art policy evaluation approaches, which include an appropriate measurement of the counterfactual. That said, the report identifies many areas for improvement. Not all respondent countries do evaluate the performance of their programmes. Not all evaluations are conducted against the objective of economic additionality, and even fewer against the objective of financial sustainability. Some assessments rely exclusively on self-evaluations and/or are one-off evaluations. Several evaluations are not rigorous, in the sense that they do not undertake an analysis of what would have occurred in the absence of the programme (“the counterfactual”)

SCHICH Sebastian;  CARIBONI Jessica;  NASZODI Anna;  MACCAFERRI Sara; 

2017-12-29

OECD

JRC106903

www.oecd.org/finance/Evaluating-Publicly-Supported-Credit-Guarantee-Programmes-for-SMEs.pdf,    https://publications.jrc.ec.europa.eu/repository/handle/JRC106903,