World Bank Group2015-12-142015-12-142015-12https://hdl.handle.net/10986/23329Access to finance, particularly credit, is widely recognized as problematic for small and medium enterprises (SMEs), hampering their growth and development. To address this challenge, many governments around the world intervene in SME credit markets through credit guarantee schemes (CGSs). A CGS offers risk mitigation to lenders by taking a share of the lenders’ losses on SME loans in case of default. CGSs can contribute to expand access to finance for SMEs. Yet they may bring limited value added and prove costly if they are not designed and implemented well. There have been efforts in recent years to identify good practices for CGSs, but the international community still lacks a common set of principles or standards that can help governments establish, operate, and evaluate CGSs for SMEs. The Principles for Public Credit Guarantees for SMEs are filling this gap. The Principles provide a generally accepted set of good practices, which can serve as a global reference for the design, execution, and evaluation of public CGSs around the world. The Principles propose appropriate governance and risk management arrangements, as well as operational conduct rules for CGSs, which can lead to improved outreach and additionality along with financial sustainability. Developed through extensive consultations with stakeholders, the Principles draw from both the literature on good practices for CGSs and sound practices implemented by a number of successful CGSs around the world.en-USCC BY 3.0 IGOBUSINESS ACTIVITIESLINE OF CREDITCREDIT MARKETSDEPOSITFINANCIAL SERVICESBORROWERECONOMIC GROWTHENTERPRISE DEVELOPMENTPEOPLEPROPERTY LAWSFINANCINGMARKET DEVELOPMENTSBALANCE-SHEETINFORMATION TECHNOLOGYINTERESTRISK-BASED PRICINGGUARANTEESCREDIT CRUNCHFINANCIAL RESOURCESETHNIC GROUPSSMALL BUSINESS FINANCEBANKING SYSTEMSCAPITAL STRUCTURELIQUIDITY RISKWELFARECAPITAL ADEQUACYENDOWMENTSENTREPRENEURSHIP FINANCINGFINANCIAL DIFFICULTYLOANCREDIT ALLOCATIONLOAN AMOUNTFEEBORROWERSSUBSIDYPRIVATE PROPERTYPAYMENTSBANKRUPTCYDEVELOPMENT FINANCE INSTITUTIONSINFORMATION SYSTEMSINTERNATIONAL BANKCREDITORCOST OF CREDITDEVELOPMENT FINANCE INSTITUTIONINFORMATION ASYMMETRIESPROVISION OF CREDITLENDERAGRICULTURE ORGANIZATIONCAPITAL FINANCEFUNDING SOURCESPUBLIC CREDITACCESS TO FINANCIAL SERVICESSMALL BUSINESSINTERNATIONAL FINANCEFINANCIAL SECTOR REFORMPUBLIC POLICYFINANCIAL SUSTAINABILITYTECHNICAL ASSISTANCEMORAL HAZARDPARTIAL CREDITUNIONBANKERS’ ASSOCIATIONSCONFIDENCE OF LENDERSMAILING ADDRESSPAYMENTFINANCIAL INSTITUTIONSDEBTFISCAL RESOURCESCAPITAL REQUIREMENTSELIGIBILITY CRITERIADEPOSIT INSURANCELENDERSBANKERSLOANSENTERPRISESFINANCIAL SYSTEMBANK FINANCINGFINANCETERM CREDITEQUITABLE TREATMENTBANKSSMALL LOANSINSTITUTIONAL REFORMSCOLLATERAL REQUIREMENTSEQUITYCREDIT GAPLOAN GUARANTEECREDIT REGISTRIESBUSINESS FINANCECAPITALOPERATING COSTSSMALL ENTERPRISESFINANCIAL OBLIGATIONSCREDIT ACCESSACCESS TO FINANCEBUSINESS DEVELOPMENTSUPPLY OF CREDITDEVELOPMENT BANKSBANKCREDITLEGAL AUTHORITYINVESTMENT BANKLOAN GUARANTEESWORKING CAPITALREPAYMENTENTERPRISEPROPERTYJOB CREATIONINSTITUTIONAL CAPACITYBALANCE SHEETTRANSACTION COSTSCREDIT GUARANTEEGUARANTEE SCHEMESCREDIT FLOWSCCPROFITABILITYINSTITUTIONAL REFORMCREDIT RISKACCESS TO CREDITECONOMIC DEVELOPMENTINTERESTSFINANCIAL SECTOR ASSESSMENTFINANCIAL ” POLICYECONOMIES OF SCALEFINANCIAL DEVELOPMENTLOAN APPLICATIONSINVESTMENTCREDIT GUARANTEESEXTREME POVERTYFINANCIAL INTERMEDIARIESBUSINESS VOLUMESCOLLATERALLOAN SIZEFINANCIAL REGULATORDEVELOPMENT FINANCELEGAL REQUIREMENTSINVESTMENTSBORROWINGFINANCIAL SUPPORTRISK MANAGEMENTBANKING SUPERVISIONFEESWOMENOUTREACHFISCAL SUPPORTSMALL BUSINESSESGUARANTEECONSUMER PROTECTIONCASH FLOWDEVELOPMENT BANKFINANCIAL SECTOR DEVELOPMENTSMALL BUSINESS ADMINISTRATIONRISK MITIGATIONSTART-UPSGOVERNMENT INTERVENTIONEMPLOYEESWorking PaperWorld Bank10.1596/23329