Cowling, M., Kacer, M. and Wilson, N. orcid.org/0000-0001-5250-9894 (2024) The demand for loan guarantees in the UK 1981–2018: time series analysis. Applied Economics Letters. ISSN 1350-4851
Abstract
Loan guarantee schemes are the primary public policy for addressing credit rationing of smaller firms across the world. In this paper we use four decades of data from the UK scheme to examine how sensitive demand for guaranteed loans is to the two main scheme parameters, the interest rate premium and guarantee coverage rate, as well as the state of the macroeconomy. Using an error correction model, we find that demand is particularly sensitive to the interest rate premium and to a lesser extent the guarantee coverage. In economic crisis periods, demand naturally increases which explains their use in Covid-19.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2024 The Author(s). This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | SME finance, bank loans, loan guarantees, credit rationing, policy intervention |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 14 Mar 2024 14:52 |
Last Modified: | 09 Apr 2024 11:57 |
Status: | Published online |
Publisher: | Taylor & Francis |
Identification Number: | 10.1080/13504851.2024.2332566 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:210239 |
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