A Review of Credit Guarantee Schemes in the Middle East and North Africa Region

This paper reviews the design of partial credit guarantee schemes in Middle East and North Africa (MENA) and assesses their preliminary outcomes. Many countries in the MENA region have established partial credit guarantee schemes to facilitate small and medium enterprise (SME) access to finance. These schemes can play an important role as MENA governments attempt to improve the effectiveness of credit registries and strengthen creditor rights.

The paper is based on a survey conducted in 10 MENA countries in early 2010. Findings indicate that:

• Average size of guarantee schemes in MENA is in line with the international average;
• Size of credit guarantees in MENA differs across countries and some schemes seem too small to make any significant impact;
• Number of guarantees seems small, while their average value looks large;
• MENA guarantee schemes are not yet reaching smaller firms;
• MENA guarantee schemes look financially sound and most schemes have room to grow.

The paper recommends that the growth of MENA guarantee schemes should be accompanied by improved design and management features and introduction of systematic impact evaluation reviews.