Are Public Credit Guarantees Worth the Hype?
4 Pages Posted: 17 Sep 2018 Last revised: 27 Apr 2020
Date Written: November 1, 2017
Public credit guarantees have become a popular instrument to try to expand lending to financially constrained firms. In many instances, these schemes have proven useful to increase access to finance. However, public interventions to extend guarantees need to be designed, evaluated, and monitored properly. Otherwise, they could prove unnecessary or bring about important costs, such as increased moral hazard or implicit subsidies.
Keywords: Private Sector Economics, Private Sector Development Law, Marketing, Labor Markets, Economic Growth, Finance and Development
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