Types of public credit guarantee schemes

Countries across the Asia-Pacific region and globally have adopted different models of public credit guarantees. In many countries, a single state agency provides the guarantees (examples include Indonesia, the Republic of Korea, Thailand, and the United States). In other cases, public schemes can operate in a more decentralized manner. For example, in Japan, there are 51 state-run credit guarantee corporations under the umbrella of the Japan Federation of Credit Guarantee Corporations (JFG). In some countries, the state is not directly involved in granting guarantees. In the United Kingdom, the British Business Bank (BBB), a state-owned development bank, sets the eligibility criteria for firms applying for a guarantee and provides the funding. However, the BBB does not decide on guarantees applications, which is done directly by financial institutions. Other countries have opted for public-private guarantee schemes with different degrees of government participation. For instance, in France, credit guarantees are offered through an organization owned 90 per cent by the state and 10 percent by banking groups.

Source

Abraham, Facundo & Schmukler, Sergio L. & Abraham, Facundo & Schmukler, Sergio L., 2017. "Are public credit guarantees worth the hype?," Research and Policy Briefs 121486, The World Bank.