Provision of credit guarantees or subsidies may remove an adverse selection leading to credit rationing. This paper … concentrates on comparison of government budget costs of credit guarantees and subsidies in a monopolistic credit market. Different … subsidies as an intervention instrument. -- credit ; subsidies ; guarantees …

Credit contracting between a lender with a market power and a small start-up entrepreneur may lead to a rejection of … be eliminated by a government support in the form of credit guarantees or subsidies. The principal-agent model of this … socially efficient projects which would not be financed otherwise. -- information asymmetry ; credit ; guarantees ; subsidies …