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Main Characteristics and goals of the Mutual Guarantee Societies and Guarantee Funds
Mutual Guarantee Societies are initiatives put in place by socio-economic circles (Chambers of Commerce, Business Federations, and Banks in the SME sector) in the area of financial services. They generally operate midway between three main partners : SMEs, Financial Organisations and Public Authorities
Guarantee Funds were founded by States or Regions as guarantee instruments, in the range of policies in favour of SMEs. They can intervene either directly towards entrepreneurs or as reinsurance of commitments taken by Mutual Guarantee Societies. In this case, there is a leverage effect between public and private sectors.
Both pursue the same purpose of providing easier access to investment loans for small or medium-sized enterprises that lack the necessary collateral required by banks in order to build a stable long term relationship.
According to historical foundation contexts, national regulatory and legal environments, local financial sector structure, various models of guarantee schemes have been designed in the different countries, which make up the rich tapestry of experience shared within the AECM.
As a result of this variety, guarantee societies are positioned as a modern and efficient financial tool working for the benefit of SMEs and adjusting to a changing environment.
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