Using data for the Italian Central Guarantee Fund for Small and Medium Enterprises, the paper analyses the effect of partial credit guarantees on firms’ financing. We show that neglecting heterogeneity in guarantee intensities, namely considering all firms as equally treated, leads to a...

Difficulties in finding appropriate financing weigh heavily on the ability to grow of Italy’s small enterprises, due to their narrow equity base and limited access to credit markets. The State Fund for guarantees to SMEs is one of the instruments used to overcome such difficulties. This essay...