Description:
Many countries in the MENA region have
established partial credit guarantee schemes to facilitate
SME access to finance. These schemes can play an important
role, especially in a period where MENA governments are
making efforts to improve the effectiveness of credit
registries and bureaus and strengthen creditor rights. This
paper reviews the design of partial credit guarantee schemes
in MENA, and assesses their preliminary outcomes. The paper
is based on a survey conducted in 10 MENA countries in early
2010. The authors find that the average size of guarantee
schemes in MENA (measured by the total value of outstanding
guarantees) is in line with the international average,
although there are wide differences across countries, and
some schemes seem too small to make any significant impact.
Most importantly, the number of guarantees looks generally
small while their average value looks large. This suggests
that guarantee schemes are not yet reaching the smaller
firms. Guarantee schemes in MENA look financially sound and
most schemes have room to grow. However, this growth should
be accompanied by an improvement of some key design and
management features, as well as the introduction of
systematic impact evaluation reviews.