Relationship between the Policy of Strengthening the Financial System and Guarantee Policy

Jorge López-Cubero López, Nuria Ceular Villamandos, Horacio Molina Sánchez, Pablo Pombo González


One of the most important obstacles that Small and Medium Enterprises (SMEs) face when addressing their growth is access to finance. The asymmetry of information, the lack of guarantees and the difficulty in establishing effective legal rights explain these difficulties in access to finance. The solution of these obstacles has led to the implementation of policies seeking to address these challenges. The paper explains the relationship of these policies for the period 2004-2016 in 39 countries that belong to the group of developing and developed countries.

Our results show that guarantee policies and the improvement of information quality are complementary. Moreover, the implementation of guarantee policies takes place in environments with weak judicial institutions. This result emphasizes the substitutable nature between guarantee systems and the legal reform of the credit rights’ protections. The implications of our findings are relevant for policy makers to implement or strengthen the guarantee systems.


guarantee schemes; SME finance; public policy; information quality; legal system.

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