The determinants of expansion of SMES under a partial credit guarantee scheme : the case of Lebanon

Abstract EN

The aim of this paper is to assess the impact of the Lebanese credit guarantee scheme (Kefalas).

We will test whether or not Kefalas is able to establish a continuous lending relationship with its clients.

The study relies on an exceptional dataset of 6,888 loan guarantee applications, which we are the first to have access to.

The dataset, which Kefalas has made available to us, contains all applications for loan guarantees received by Kefalas since its establishment in 2000 until December 2009.

We are unable to find evidence of a continuous lending relationship between Kefalas and its clients.

We also determine that, even among repeat customers, multiple borrowing is not due to the establishment of a continuous relationship with Kefalas but simply an extension of previous loans.