Public Guarantees on Loans to SMEs: An RDD Evaluation

54 Pages Posted: 8 May 2017

See all articles by Guido de Blasio

Guido de Blasio

Bank of Italy

Stefania De Mitri

Bank of Italy

Alessio D'Ignazio

Bank of Italy

Paolo Finaldi Russo

Bank of Italy

Lavinia Stoppani

Catholic University of Milan

Date Written: May 3, 2017

Abstract

The paper evaluates the impact of the guarantees provided by the Italian scheme Fondo di Garanzia on the access to credit for small and medium enterprises. The study exploits the mechanism that assigns the guarantees, which is based on a scoring system to assess eligibility. By using regression discontinuity techniques, the paper finds that at the threshold between eligible and non-eligible firms, the program has a positive impact on bank loans to firms; however, the scheme has no impact on the interest rate charged by the banks, while it affects positively the likelihood that a firm becomes unable to repay its loans. The guaranteed loans were mostly used to finance working capital. Finally, the paper provides inference for far-from-the-threshold firms.

Keywords: credit guarantees, public guarantees, access to credit, SMEs financing

JEL Classification: L25, O12, G28

Suggested Citation

de Blasio, Guido and De Mitri, Stefania and D'Ignazio, Alessio and Finaldi Russo, Paolo and Stoppani, Lavinia, Public Guarantees on Loans to SMEs: An RDD Evaluation (May 3, 2017). Bank of Italy Temi di Discussione (Working Paper) No. 1111, Available at SSRN: https://ssrn.com/abstract=2964813 or http://dx.doi.org/10.2139/ssrn.2964813

Guido De Blasio (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Stefania De Mitri

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alessio D'Ignazio

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Paolo Finaldi Russo

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Lavinia Stoppani

Catholic University of Milan ( email )

Milan, MI
Italy

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