The operation of government-backed loan schemes: An assessment of the credit guarantee corporation in Malaysia and the loan guarantee scheme in the United Kingdom

摘要

Government-backed loan schemes have been introduced in many countries to enable small and medium size enterprise (SMEs) to have access to funding at a reasonable cost. This paper concentrates on the schemes offered in Malaysia by the Credit Guarantee Corporation (CGC). The Loan Guarantee Scheme (LGS) in the UK which has been subject to extensive research, ia used for comparative purposes. The effectiveness of these schemes in meeting the needs of SMEs, banks, public policy makers and the wider economy is implementing such schemes. The CGC has recently taken bold steps, which should enable it to play a more effective role in future. A survey of users of the Principal Guarantee Scheme was conducted over the period April-June 1994. The composition of the sample is described. This pilot study concentrated on four main areas: how firms were introduced to the CGC; the level of finance additionality generated;the level of economic additionality in evidence and the relationship between small firms, bankers and the CGC. The findings suggest that CGC can point to very real progress in a number of key areas, although a number of observations are put forward forward for CGC's consideration.