The European Framework of Guarantee Systems/Schemes: Main Characteristics and Concepts (2006)

Abstract

In financial systems, guarantee is a “scarce” good (or a scarce resource), especially the best certified and weighed guarantees, which causes serious difficulties in the access to financing by micro, small and medium-sized enterprises (micro and SMEs). Also the guarantee is an expression of the problem of asymmetric information. In short, this is a contradictory situation: on the one hand, micro and SMEs are important for the employment and wealth creation; and on the other hand, the rules of the financing system discriminate these enterprises in relation to other business and even territorial structures. One solution is found in guarantee systems/schemes. The real diagnosis of the problem of the access to financing by micro and SMEs shows that international rules on call for capital and provisions, established according to the certification and weighting of guarantees, cause competitive inequality to micro and SMEs in financial markets. Taking the real diagnosis of the access to the financing of micro and SMEs as a basis, once the option is adopted either to establish and to implement a public policy of a guarantee system/scheme in a territory or to modify the existing one, the basic decision to be taken is what the most appropriate model of guarantee system/scheme is to be implemented and developed, on the base of a state policy where the actors of the system are involved: public, financial and enterprise sector. Finally, our paper describes the main basic variables of the activity (legal framework, financial support to the public sector, involvement of beneficiaries/users of the system’s entities, etc.), as well as the representative variables of the system’s achievements: number of beneficiaries/users of the system, the level of coverage achieved in operations, their cost for beneficiary enterprises and the accepted terms, etc. It culminates relating the actions to the profits of the systems/schemes of guarantee for the European case.