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POSSIBLE KEY SUCCESS FACTORS: REGIONAL SYSTEM AND REGUARANTEE

Hiroshi TAHARA (Japan Finance Corporation, JFC)

Long-term Expert, Chief Advisor / Credit Guarantee

Japan International Cooperation AgencyBank IndonesiaJuly 26, 2011

CONTENTS INTRODUCTION

CREDIT GUARANTEE SYSTEMS:

GLOBALLY POPULAR & DIVERSE

ISSUES

CHALLENGES

GOOD PRACTICES

POSSIBLE KEY SUCCESS FACTORS: REGIONAL SYSTEM, REGUARANTEE

CONCLUSION

(Source: Materials delivered in conferences of “ACSIC,” which is an

abbreviation of “Asian Credit Supplementation Institution

Confederation,” etc.)

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INTRODUCTION A huge number of people all over the world have been attracted by credit

guarantee systems as a plausible panacea for SME financial problems.

However, due to poor performance, many of them have been severely criticized.

Also, there is no global consensus on definition of “success” regarding them.

Meanwhile, a lot of information is available thanks to the ACSIC in Asia.

Such international alliance makes this presentation possible.

This workshop must be a good opportunity to share knowledge among us.

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CREDIT GUARANTEE SYSTEMS: GLOBALLY POPULAR & DIVERSE

More than one hundred countries seem to have

credit guarantee systems for SMEs.

It is quite difficult to categorize these systems; really

diverse.

Let’s see some examples!

(Note) Data: 2009 Fiscal Year, and exchange rates between USD and a

local currency are chosen by each guarantee institution.

Overview of Credit Guarantee Systems in AsiaCOUNTRY/

REGIONNAME/abbr.

MAIN SHAREHOLDER OTHER SHAREHOLDERS, etc.

INDIA CGTMSE Central Gov’t (80%) 20%: Small Industry Development Bank

INDONESIA

ASKRINDO Central Gov’t (100%) Before December 2007, central bank’s share: 55%

JAMKRINDO

Central Gov’t (100%) >Central gov’t established JAMKRINDO, as a credit guarantee institution originally for cooperatives.>Indonesian entrepreneurs under Indonesian Chamber of Commerce (KADIN Indonesia) established PKPI.PKPI

Indonesian entrepreneurs (100%)

JAPAN

JFC (Insurance)

Central Gov’t (100%)Every year central gov’t is earmarking necessary fund for JFC.

CGC (NFCGC)

Regional Gov’t (see right column)

Roughly 80%: regional Gov’ts (including central gov’t), 20%: financial institutions, etc. based on % of total received donations

KOREA

KODIT >Based on a law, all the banks in Korea must contribute about 0.225% per annum of their outstanding amount of loans to KODIT.>KOTEC, CGFs, and even KOREG, the reguarantee institution, also gain capital every year like KODIT. The shareholder composition of each institution is not known, but recently, banks seem major contributors (e.g. banks gave 90% of new capital to KODIT in 2008.).

KOTEC

CGF (KOREG)

MALAYSIA CGC Central Bank (76%) 24%: financial institutions

NEPAL DCGC Central Bank (47%) 46%: central gov’t, 7%:commercial banks

PHILIPPINES SBC Central Gov’t (43%)57%: 5 gov’t financial institutions, e.g. Land Bank of the Philippines

SRI LANKA CBSL Central Bank itself operates the credit guarantee system.

TAIWANTaiwan SMEG

Central/Regional Gov’t (79%, percentage of each unknown)

19%: contracted financial institutions, 2%: large firms, etc.(note) shareholding composition is based on % of total received donations

THAILAND SBCG Central Gov’t (93%) 4%: private banks, 3%: state-owned banks, etc.5

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Overview – continued (first-level guarantee institutions only)

COUNTRY/REGION NAME/abbr. CAPITAL

(million USD)MAX. GEARING

RATIOCOVERAGE(%)

INDIA CGTMSE 370 (as of Sept. 2008) N.A. 75 or 85

INDONESIA

ASKRINDO 204 10 times of net worth 20 – 70 (credit guarantee)

JAMKRINDO 157 10 times of net worth Up to 75

PKPI 1 10 times of equity Up to 75

JAPAN CGC 15,164 (Basic Assets Fund)

60 times of Basic Assets Fund

80 in principle (special guarantee : 100)

KOREA

KODIT 5,461 20 times of capital50 – 85 (depends on credit

ratings of borrowers and guarantee term)

KOTEC 2,308 20 times of capital50 – 90 (depends on

borrower’s technology appraisal ratings , etc.)

CGF N.A. 15 times of capital Partial

MALAYSIA CGC 712 (net worth) 6 times of reserve 30 – 100 (depends on the each guarantee scheme feature)

NEPAL DCGC 3 No regulation 75

PHILIPPINES SBC 5 (reserve fund) 3 times of reserve fundUp to 80 (depends on some

elements such as rating of borrowers)

SRI LANKA CBSL N.A. N.A. Up to 50

TAIWANTaiwan SMEG

951 (net worth) 20 times of net worth 40 – 100 (depends on the each guarantee scheme feature)

THAILAND SBCG 139 10 times of capital Up to 100 (depends on the each guarantee scheme feature)

Overview – continued

CONUNTRY/REGION

DESCRIPTION (Who operates the guarantee system?)

HONG KONGTrade and Industry Department (one of the departments of the Special Administrative Region)

MACAOMacau Economic Service (one of the departments of the Special Administrative Region)

PAKISTAN Central Bank

P.R. CHINAThousands of guarantee institutions exist, but details of them are not well known.

SINGAPORE SPRING Singapore, a state agency

VIETNAM Vietnam Development Bank (from 2009)

CAMBODIA These countries seem to have some interests in establishing a credit guarantee system. They sent delegations to “Workshop on SME Credit Guarantee Systems in Asia-Pacific Region” in Hangzhou, P.R. China, in June, 2010.

LAO PDR

MYANMAR

OTHERSBRUNEI DARUSSALAM, DPRK, BANGLADESH, EAST TIMOR, BHUTAN, MALDIVES, MONGOLIA: Unknown 7

Overview - continuedDESCRIPTION COUNTRY/

REGIONTHE NUMBER OF

COUNTRIES/REGIONS %

Countries/regions with current system(s)

Indonesia, Malaysia, etc.

16 61.5

Countries/regions showing interests in guarantee system

Cambodia, Lao PDR, and Myanmar

3 11.5

Countries/regions where uncertain

Bangladesh, Mongolia, etc.

7 27.0

Total countries/regions 26 100.0 8

Overview - continuedCOUNTRY/REGION NAME/abbr. FULL NAME URL

INDIA CGTMSECredit Guarantee Fund Trust for Micro and Small Enterprises

http://www.cgtmse.in

INDONESIAASKRINDO PT Asuransi Kredit Indonesia http://www.askrindo.co.id

JAMKRINDO Perusahaan Umum Jaminan Kredit Indonesia http://www.jamkrindo.com

JAPAN

JFC (Insurance)

Japan Finance Corporation http://www.jfc.go.jp/

CGC (NFCGC)(NFCGC)National Federation of Credit Guarantee Corporations

http://www.zenshinhoren.or.jp/index.php

KOREA

KODIT Korea Credit Guarantee Fund http://www.kodit.co.kr

KOTEC Korea Technology Finance Corporation http://www.kibo.or.kr

CGF (KOREG)(KOREG)Korea Federation of Credit Guarantee Foundations

http://www.koreg.or.kr

MALAYSIA CGC Credit Guarantee Corporation Malaysia Berhadhttp://www.iguarantee.com.my

NEPAL DCGC Deposit and Credit Guarantee Corporation http://www. dicgc.org.np

PHILIPPINES SBCSmall Business Guarantee and Finance Corporation

http://www.sbgfc.org.ph

SRI LANKA CBSL Central Bank of Sri Lanka http://www.cbsl.gov.lk

TAIWAN Taiwan SMEGSmall and Medium Enterprise Credit Guarantee Fund of Taiwan

http://www.smeg.org.tw

THAILAND SBCG Small Business Credit Guarantee Corporation http://www.sbcg.or.th

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By visiting the above URLs you can get a lot of information (Some of them have English pages.). For information on guarantees in European nations, visit http://www.aecm.be/ENG/Membres/it.php.

Comparisons: Capital (Net Worth)

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

ASKRINDO (INDONESIA)JAMKRINDO (INDONESIA)

CGCs (JAPAN)KODIT(KOREA)

KOTEC (KOREA)CGC (MALAYSIA)

DCGC (NEPAL)SBC (PHILIPPINES)

Taiwan SMEGSBCG (THAILAND)

Capital (Net Worth) (unit: million USD)

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Comparisons: Guarantee Volume

0 100 200 300 400 500

JAMKRINDO (INDONESIA)CGCs (JAPAN)

KODIT(KOREA)KOTEC (KOREA)

CGFs (KOREA)CGC (MALAYSIA)

DCGC (NEPAL)SBC (PHILIPPINES)

Taiwan SMEGSBCG (THAILAND)

Outstanding Amount of Guarantees as of 2009 (unit: billion USD)

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Private Financial

Institutions

Loan

Central Government

SMEsCredit Insurance Credit Insurance

SystemSystemCredit Guarantee Credit Guarantee

SystemSystem

Supervision

GUARANTEEGUARANTEE

(52) CreditGuarantee

Corporations(Non-profit

organization under a special

law)

Credit Insurance Contract

SupervisionContribution

SupervisionContribution

Credit Guarantee Contract

JapanFinance

Corporation(100% state-owned stock

company under a special law)

Local Government

Contribution

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Japanese “Credit Supplementation System” Simplified Chart

Credit Supplementation System: Simplified Flow

JapanFinance

Corporation

Note: ① ～⑤ indicate the flow from guarantee application to redemption while ⑥ ～⑨ show the flow from

subrogated payment and beyond in event of default.13

1 Globally Unique “Two-tier System”

2 World Largest Guarantee Volume/The Number of Guaranteed SMEs (1) Provides about 35 trillion JPY worth of funds to SMEs (2) 1.59 million SMEs utilize the Credit Guarantee System

(Note: as of March 2010)

3 Functioning as Indispensable Infrastructure in Socioeconomic Context and “Safety Net”

(1) Approximately 40% (1.59 million out of total 4.2 million) of the SMEs in Japan utilize the System

(2) 35 trillion JPY worth of funds are equivalent to 14% of the total loans to SMEs in Japan (3) Functioning as a safety net for SMEs

4 Fundamental Reform Already Done Responding to the Demands of the Present Age

(1) Applies flexible guarantee fee/insurance premium rate based on the credit risks of the SMEs (introduced since April 2006)

(2) Sharing appropriate risks between CGCs (80%) and financial institutions (20%) (introduced since October 2007, but for some preferential treatments 100% guarantees still

apply. )

Japanese Credit Supplementation System: Characteristics

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Globally popular SME financial support tool, Credit Guarantee System (A 1997 Global survey by a UK consulting firm, Graham Bannock and Partners Ltd.) The most comprehensive worldwide study report. Hereinafter, “Graham Report”

Description Total

Countries with current system(s) 85 (48%)

Countries without a system 14 (8%)

Countries where uncertain 76 (43%)

Countries with defunct system(s) 2 (1%)

Total countries 177 (100%)

Total Systems 146

(Source) Graham Report: CREDIT GUARANTEE SCHEMES FOR SMALL BUSINESS LENDING A Global Perspective, by Graham Bannock and Partners Ltd. http://cec.shfc.edu.cn/download/20100925104414_239846439874.pdf#search='"credit guarantee schemes for small business lending"'

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Largest and best-established guarantee systems ranked in ‘97 by Graham Report

Country/Region

No. of new commitmen

ts

The characteristics of the system and latest data, etc.

1. JAPAN 1,491,154National & regional. The second-level “credit insurance” was regarded as reguarantee, but now it is equipped with insurance-based operation.

2. TAIWAN 114,294There is no regional credit guarantee system, but some city governments have provided capital with the credit guarantee institution, Taiwan SMEG.

3. KOREA 69,521

The number in the left column is about one of the two national credit guarantee institutions. Also, after this global research, the gov’t has added another new system, a regional credit guarantee and reguarantee system, in addition to two national credit guarantee systems.

4. USA 53,592 U. S. Small Business Administration, SBA, is operating the national level credit guarantee system.

5. MALAAYSIA 17,510 CGC is operating the national level credit guarantee system.

6. CANADA 13,092 Industry Canada, one of the Canadian Ministries, is operating the national level credit guarantee system.

10. GERMANY 6,612

National & regional. At the end of 2009, total SME beneficiaries are 41,000, and new 7,000 SMEs have benefited from the system in 2009.

11. SPAIN 6,571

Japanese two-tier system is the model of the Spanish guarantee system. Beneficiaries of the system has been growing drastically, and they are now roughly 100,000. Accordingly, the ranking should be 4th or 5th now.

(Note) Figures are given based on data in available year (1993 – 1995)(Source) Graham Report

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International research activities, etc. on credit guarantee systems (after Graham Report)

Institution Date, etc. Content of activities, etc.

Asian Development Bank & OECD

July, 2000International Workshop (Manila, the Philippines)

JASMEC (JFC’s predecessor)2001

On-site research (Korea, Taiwan, UK, Germany, France, and Italy)

United Nations Industrial Development Organization, UNIDO

2003

Technical Working Paper ( Theme : “Credit Guarantee Schemes for Small Enterprises : An Effective Instrument to Promote Private Sector-Led Growth?” (Hereinafter, “Unido Report”)

ASEAN March, 2004 International Workshop (Bangkok, Thailand)

JASME (JFC’s predecessor)2004 & 2005

On-site research (Germany, France, USA, Canada, Spain, and Finland)

International Labor Organization, ILO

2004 A manual for guarantee fund managers

Dep’t for International Development (UK gov’t) 2005

Working Paper (Theme : “Do Credit Guarantee Lead to Improved Access to Financial Services?” Evidence from Chile, Egypt, India, Poland

The Chinese gov’t & Asian Development Bank

Sept. 2005 International Workshop (Dalian, P.R. China)

Jan. 2007

Technical Assistance Consultant’s Report （ Conclusion : guarantee systems in only a few nations can be a model, in particular, re-guarantee systems in these countries should be learned.)

World Bank March 2008 International Workshop (Washington D.C., USA)

Chinese gov’t, Bank Indonesia, etc.

June, 2010International Workshop (Hangzhou, P.R. China)

Asian Credit Supplementation Institution Confederation, ACSIC

Info & data exchange

International alliance among credit guarantee institutions in Asia, etc.

European Mutual Guarantee Association, AECM

DittoInternational alliance among credit guarantee institutions in Europe.

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ISSUES In many countries, the numbers of SMEs using credit guarantee

systems are quite small: less than 1 % of total SMEs.

Governmental budgetary support in order to sustain credit

guarantee systems has become large in some countries.

Moral hazard: banks simply transfer SMEs default risk to

guarantee systems, SMEs feel less pressure to repay their

guaranteed loans.

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CHALLENGES

Increasing SMEs that can benefit from credit

guarantee systems.

Making the systems sustainable ones.

Evaluating performance of the systems.

Desirable Approaches of Credit Guarantee System (1)

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ItemsDesirable Approaches, etc.

Graham Report UNIDO Report

Whether a gov’t agency or an independent special corporation should administer the system

Regional independent corporations

Independent special corporation

FundImportant to have investment income from a fund immediately following the establishment of the system

Create fund through public and private-sector investment to obtain investment income

Personnel and management

Secure personnel capable of quickly processing guarantee applications, etc.

Highly experienced local staff and participation by representatives of guarantee recipient companies and financial institutions

System marketing

(1) State public objectives and disclose operations in a timely manner

(2) Conduct active marketing and communication with both financial institutions and SMEs

Inform financial institutions and SMEs of the system’s existence and develop marketing activities to promote use

Risk sharing

(1) Guarantee coverage ratio of 60 – 80% appropriate (100% guarantees possible in special cases), 50% not appropriate

(2) Secure any form of collateral from guarantee recipients

(1) Guarantee institutions, financial institutions and guarantee recipients all share risk

(2) Guarantee coverage ratio of 60 – 80% appropriate

(3) Secure as much collateral as possible from guarantee recipients, including third-party guarantee

Additional services

Provide management consultation and training to financial institutions and guarantee recipients

(1) Provide training to guarantee recipients

(2) Provide training to bankers on micro credit

Guarantee fees(1) Registration fee of 1 – 2% of financed

amount(2) Collect guarantee fees at annual rate of 0.5

– 4.0% of guarantee liability in advance

(1) Collect an annual guarantee fee and an application service charge

(2) Set rates commensurate with risk

Desirable Approaches of Credit Guarantee System (2)

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ItemsDesirable Approaches, etc.

Graham Report UNIDO Report

Default and requests to execute guarantee obligations

(1)Clarify the definition of the former and the conditions for the latter in contracts between guarantee institutions & financial institutions

(2) Turning down guarantee payment

requests should be 5% or less of the

total requests

(1)A claims rate of 2% - 3% is appropriate

(2)Clear definition of trigger conditions and timely claims handling

(3)Vigorous post-claim loss recovery

Relationship between guarantee institutions and financial institutions

Relationship should be profitable for both parties (financial institutions should consider using guarantees as a part of their management strategy)

(1) A relationship of trust should be built between both parties

(2) Decision-making of both parties should be independent

Leverage (Gearing ratio)

7 – 8 times within 10 years of the system’s establishment

At least 5 times (set in accordance with macro-economic conditions)

Reinsurance (Reguarantee) Different by countries (most developed in Japan and Spain)

Partial reinsurance through reinsurance (reguarantee) institutions

Sustainability Not directly mentionedSecure independent profitability and stability through establishing reserves

Regulation and supervision

Not mentionedSelect supervisory institution in accordance with conditions in the country

Additional criteria for making guarantee systems successful

Management that is not excessively idealistic based on market principles and a plan for moderately expanding the system

(1)Government intervention should be limited to reinsurance (reguarantee)

(2)Information should be exchanged internationally on success stories, etc.

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GOOD PRACTICESPOSSIBLE KEY SUCCESS FACTORS: REGIONAL SYSTEM, REGUARANTEE

Japan Korea SpainRegional credit guarantee institutions

Total 52: Each of the 47 prefectures has at least one CGC (Note 1)

Total 16: Each of the 16 provinces has one CGF(Note 1)

Total 20: 15 provinces has at least one SGR (note 1)

Gearing ratio Max. 60 times the capital

Max. 15 times the capital

Unknown (9.46 times the capital, actually) (2009)

Default rate, or NPL (%)

3.19 (2009)Subrogation/Outstanding guarantees

1.45 (2009)Subrogation/Outstanding guarantees

0.5 (impossible to recover), 2.0 (difficult to recover) (2004) (Note 2)

Coverage80, 100%(70, 80%:reinsurance)

Partial (50, 60-80%:reguarantee)

100%(30-75%:reguarantee)

Premium (fee)(%, per annum)

Min 0.45, Max 1.90 Min 0.5, Max 2.00

(Note 3) Min 0.5, Max 1.0 (Note 4) Min 0.1, Max 0.5

(Notes) (1) Japan: CGC=Credit Guarantee Corporation, Korea: CGF=Credit Guarantee Foundation, Spain: SGR=Sociedades de Garantia Reciproca. Spain consists of17 provinces. In addition to 20 regional level SGRs, there are 3 national level SGRs. (2) Data given by CESGAR (national federation of SGRs). (3) =payable every year, (4)=payable at the end of guarantee contract

(Source) ACSIC, and an on-site research by JASME (JFC’s predecessor)

Korea Credit Guarantee Organizations

- 2 national level (established in 1976, 1989)

- 16 regional level CGFs & a reguarantee organization, KOREG, for CGFs

The regional guarantee system has been added to national ones in 2000 and KOREG began reguarantee in 2004.

The regional system’s performance is brilliant: They see no system problems at all!

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Latest operational results of Korea’s regional guarantees

2005 2006 2007 2008 2009

Acceptance of guaranteeNumber 79,929 77,666 94,582 187,878 467,173

Amount 2,157 2,369 2,751 3,890 8,391

Outstanding guaranteeNumber 136,228 164,386 195,808 306,006 660,367

Amount 3,413 4,032 4,586 5,989 11,195

Payment under guaranteeNumber 5,319 3,098 3,261 4,201 10,657

Amount 113.7 68.0 57.2 77.4 162

Recovery receivedNumber 1,640 2,175 2,156 2,233 13,564

Amount 49.8 59.2 58.0 58.1 391.8

Guaranteed SMEs Number 136,228 164,386 195,808 306,006 660,367

(Source) The 22nd http://www.smeg.org.tw/acsic22/news_notice_0909.html& 23rd Conferences of Asian Credit Supplementation Institution Confederation

Name of Guarantee Institution: Credit Guarantee Foundation, Korea Federation of Credit Guarantee Foundations (reguarantee institution)

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(Unit: Billion Won)

Latest operational results of the Philippines’s guarantees

2005 2006 2007 2008 2009

Acceptance of guaranteeNumber 59 64 43 36 17

Amount 4.973 6.87 4.621 3.45 1.79

Outstanding guaranteeNumber 87 95 74 43 30

Amount 5.285 5.934 3.717 2.32 1.73

Payment under guaranteeNumber 1 4 5 2 0

Amount 0.014 0.135 0.252 0.10 0

Guaranteed SMEs Number 87 95 74 4 16

(Source) The 22nd http://www.smeg.org.tw/acsic22/news_notice_0909.html& 23rd Conferences of Asian Credit Supplementation Institution Confederation

Name of Guarantee Institution: Small Business Guarantee and Finance Corporation

National System Only!

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(Unit: Million USD)

Latest operational results of Thai’s guarantees

2005 2006 2007 2008 2009

Acceptance of guaranteeNumber 3,376 1,916 2,298 1,366 5,763

Amount 217.71 210.35 185.12 93.90 680.71

Outstanding guaranteeNumber 8,025 8,688 8,999 8,631 13,084

Amount 499.77 585.31 642.60 630.74 1,259.36

Payment under guaranteeNumber 60 101 124 113 141

Amount 5.60 12.29 9.88 8.78 8.59

Recovery receivedNumber N.A. N.A. N.A. N.A. 745

Amount 0.63 0.69 1.11 1.50 1.39

Guaranteed Projects Number 8,025 8,688 8,999 8,631 5,763

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(Source) The 22nd http://www.smeg.org.tw/acsic22/news_notice_0909.html& 23rd Conferences of Asian Credit Supplementation Institution Confederation

Name of Guarantee Institution: Small Business Credit Guarantee Corporation (SBCG)

National System Only!

(Unit: Million USD)

Spain Credit Guarantee Organizations (total 23)

- national level: 3- regional level: 20 in 15 out of 17

provinces (some provinces have more than 1) and a

reguarantee organization for them The regional guarantee system is based on

“mutual guarantee” structure, which is very popular in southern European countries.

The system’s growth in terms of the outstanding guarantees is remarkable: 3.8 times in 10 years!

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Growth of guarantee volume in Spain (unit: million Euro)

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6,524,329,000 Euro = IDR 81,554,112,500,000

(as of December 31, 2009)

Rough calculation

As 1 Euro = IDR 12,500

Private Financial Institutions

Loan

SMEs

GUARANTEEGUARANTEE

Mutual Guarantee

Organizations

Contribution

Mutual Guarantee<BASIC PATTERN: Italy, France, etc.>

Private Financial Institutions

SMEs

Chamber of

Commerce and

Industry, etc.

GUARANTEEGUARANTEE

Contribution

Mutual Guarantee

Organizations

Membership Fee, etc.

Loan

<INDIRECT PATTERN: Germany, etc.>

(Note) In some cases, there are “second-level guarantee” in both patterns.

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Private Financial InstitutionsOne of the “Protective partners”

Loan

Participating partners (micro-

SMEs)

Counter guarantee (free of charge), coverage: 30 - 75%

Guarantee

(100%)

Mutual Guarantee (Spain) A variety of counter guarantee

(=reguarantee)

Protective partners

Central

Bank

Central

Government

Mutual Guarantee Organizations (23

SGRs)

CERSA

Mainly owned by central gov’t

European Investment

Fund

Regional Government

(6 ways support)

1) Capital

participation

2) Subsidized loans

3) Contribution to

reserve

4) Cover “study fee”

5) Tax benefits

6) Counter

guarantee

(Source)

(1) On-site research by JASME (JFC’s predecessor)

(2) “The Spanish Guarantee System,” by Professor Patrizia Pia, Torino University, Italy

Capital

Capital

Capital

Be careful!

SGR: Non-profit Organization !!

Partial Counter guarantee

Supervision

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CONCLUSION Although there are a lot of countries having credit guarantee

systems, and some of them have decades of history with a variety

of trial and error, only a handful of them seem to be “successful.”

Some systems equipped with regional and reguarantee

arrangement in Japan, Korea and Spain are regarded as good

practices.

Countries like Indonesia now are trying to develop a regional credit

guarantee system amid a keen interest in reguarantee.

Possible key success factors, regional system and reguarantee, are

worth studying toward the future in the context of MSME financing

in the 21st century.

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Thank you very much! For more information

indonesiatahara@yahoo.co.jp

<Bank Indonesia Project Team>Yunita Resmi SariYufrizalRahmi ArtatiAlen Suci MarlinaAndhi Wahyu Riyadno