The determinants of the utilisation of government-backed loan schemes for small and medium-sized enterprises : A case study of Malaysia

Small and medium-sized enterprises (SMEs) in both developed and developing countries are perceived to play a crucial role in economic development. It is acknowledged that SMEs face difficulties in obtaining external funding from private sector financial institutions. As a consequence, government backed loan schemes have been introduced in many countries to enable SMEs to have access to funding as a reasonable cost. The official body offering guarantees for bank facilities in Malaysia is the Credit Guarantee Corporation (CGC). Using data from 1984-93, the authors develop a model which determines the utilisation of the CGC's facilities. (DÜI-Sen)