Optimal credit guarantee fee rate for the small and medium-sized enterprises in Japan

2020 Fiscal Year Final Research Report

• Project/Area Number: 19K13742
• Research Category: Grant-in-Aid for Early-Career Scientists
• Allocation Type: Multi-year Fund
• Review Section: Basic Section 07060:Money and finance-related
• Research Institution: Tokai University (2020); Waseda University (2019)
• Principal Investigator: TAGHIZADEH HESARY FARHAD 東海大学, Institute of Social Sciences, lecturer (00770041)
• Project Period (FY): 2019-04-01 – 2021-03-31
• Keywords: SME / Small business / Credit guarantee / Credit guarantee scheme / Moral hazard / Asymmetry of information / Banking / Microfinance

Outline of Final Research Achievements

One efficient way to promote small and medium-sized enterprises (SMEs) financing is through credit guarantee schemes, by which the government guarantees a portion (ratio) of a loan provided by a bank to an SME. In this research project, we developed theoretical models for calculating the optimal credit guarantee ratio and the optimal guarantee fee (the fee that needs to be paid by the SME) and empirically calculated the “ratio” and the “fee” using data of various Asian economies. The ratio should be at such a level that it achieves the government’s goal of minimizing banks’ nonperforming loans to SMEs. In addition, the ratio and the fee should realize the government policy objective of supporting SMEs by reducing information asymmetry. In an economic recession, the ratio needs to be increased, and the fee needs to be reduced to facilitate SME financing and economic growth.

Free Research Field

Economics and Finance

Academic Significance and Societal Importance of the Research Achievements

最適な信用保証比率：我々の結果は3つの要因が最適な信用保証比率を決定することを示しています：（i）政府の政策、（ii）マクロ経済状況、（iii）銀行の行動。モラルハザードを回避し、中小企業への貸付の安定性を確保するために、政府はマクロ経済状況に基づいて最適な信用保証比率を設定し、その健全性に基づいて銀行ごとまたは銀行グループごとにそれを変える必要があります。
最適な信用保証手数料：経験的な結果は、モラルハザードを回避するために、またマクロ経済状態に応じて、健全でリスクの高い中小企業では信用保証料が異なるべきであるという仮説を裏付けています。