NOTE AND SUMMARY STATISTICS FOR THE LOAN GUARANTEE SCHEME

The Loan Guarantee Scheme (LGS) was set up in 1981 to fill a perceived gap in the financing of smaller firms. It was designed specifically for firms who were constrained in their ability to borrow from banks by a lack of collateral. In 1996, loans issued under the scheme were at their highest level ever and rising at an increased rate. This paper uses previously unavailable data to give a broad feel for how borrowing patterns have changed over the period 1987–1995, the type and nature of borrowers using the scheme and the type of loans which they take out. The results give a number of important insights which merit further attention from academics and policy‐makers. Unfortunately, there is no information on the attitudes of banks towards the scheme, although anecdotal evidence suggests that they have adopted a more favourable, proactive stance towards the scheme in the last three years.