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© Pablo Pombo
PABLO POMBO
Thecnical Secretary of the Iberoamerican Network of
Guarantees (REGAR)
AECM Seminar Intenational, Berlin, 18-20 June 2015
Founding President
Guarantees for innovative SMEs: Ways to prosperity
Panel: “Global benchmarking and cross learning” 11,45 – 13,00
“Support and opportunities for innovative and growing SMEs from a Latin American
perspective”
Friday 19 June 2015
© Pablo Pombo
Introduction by the panellists themselves
If possible you could provide some statistics and examples pointing out differences/ similarities from one country to the other?
34 years in the sector of guarantee President and CEO of a Spanish SGR (1981-1996) President of CESGAR (1991-96) and Founding President AECM (1992-96) Technical Secretary REGAR - 19 consecutive annual forums Lecturer and researcher, Award UNICAJA of economic research from 2007.
Panelist and speaker lectures about 33 countries. PhD in Economics and Business Sciences. Associate Professor at University
of Cordoba (Spain). International guarantee systems (CGSs) consultant since 1996 with projects
developed in Latin America for national and multilateral institutions and international cooperation (AECID; GTZ; COSUDE, FUNDES, PNUD, IDB, AFD, WB, UE, etc.)
Spanish order of civil merit (1995)
© Pablo Pombo
Introduction by the panellists themselves
If possible you could provide some statistics and examples pointing out differences/ similarities from one country to the other?
Summary: • Globally • Diagnosis - conceptual framework • Classification and characterization • Relations with financial institutions and SME • 2013 statistics: situation, trends, perspectives and challenges
© Pablo Pombo
XX Iberoamerican Forum guarantee systems, 24-25 of september 2015, Lima (Perú)
http://foroiberoamericano.redegarantias.com
© Pablo Pombo
XIX Iberoamerican Forum guarantee systems, 17-19 of September 2014, Valladolid – Madrid (Spain)
8 moderators, 40 panelists, 500 participants from 22 countries, of which 135 international together with national 365, representatives of public and private guarantee systems, and other authorities of Latin America. This year, in addition to four panels, we have developed four working groups that has involved the intervention of 4 moderators and a few 25 panelists in different geographical areas.
© Pablo Pombo
XVIII Ibero-American Forum guarantee systems, 25 to 27 September 2013, Rio de Janeiro (Brazil)
© Pablo Pombo
Globally
Summary:
• Globally • Diagnosis - conceptual framework • Classification and characterization • Relations with financial institutions and SME • 2013 statistics: situation, trends, perspectives and challenges
© Pablo Pombo
GUARANTEE SYSTEMS (CGSs): A GLOBAL REALITY / NEED
2.- The CGSs are heterogeneous, not homogeneous
4.- Represent different safety, quality, effectiveness, impact and relevance
Fuente: Elaboración propia.
3.- The more developed countries use them more intensively
Sociedades de garantía, jurídicas Sociedades de garantía, jurídicas mutualistas Programa de garantía
Sin sistema/esquema de garantía
Heterogeneous guarantee operators 1.- Internationally
recognized reality
© Pablo Pombo
Multilateral recognition and impact assessments
● WORLD BANK In 2015 created the Task Force on "Desing, implementation and evaluation of credit guarantee schemes CGSs for small and medium enterprises" and document "Principles for credit guarantee schemes CGS s for SMEs“ http://www.slideshare.net/AecmEurope/principles-consultative-document-june-2015
● OECD An OECD report in 2012 highlights that nearly every country should launch loan guarantee programs. http://www.aecm.be/es/oecd-publishes-scoreboard-of-sme-finance-smes-harder-hit-by-credit-crunch-than-larger-companies.html?IDC=119&IDD=1211&NEWSLETTERID=1214
● IMF An IMF report in 2010 highlights the importance of guarantees to improve the access to finance for SMEs http://www.imf.org/external/pubs/ft/weo/2010/update/01/index.htm
● An study in 2010 about the macroeconomic benefits of the activity of the German Guarantee Banks, VDB The activity of the German Guarantee Banks has lead to an improvement of GDP growth and of the State's financing, in addition to the improvement of the access to finance for SMEs http://www.aecm.be/es/inmit-study-on-the-macroeconomic-benefits-of-the-german-guarantee-banks.html?IDC=31&IDD=183
© Pablo Pombo
A GLOBAL VISION: GUARANTEES IN PORTFOLIO 2013 (millions US$)
0
50000
100000
150000
200000
250000
300000
350000
400000
Japón, Korea y Taiwan
EEUU Canada Europa (países AECM)
Latinoamérica
Japón, Korea y Taiwan
60%
EEUU 17%
Canada 2%
Europa (países AECM)
17%
Latinoamérica 4%
Source: Own elaboration
Heterogeneous guarantee operators
© Pablo Pombo
A GLOBAL VISION: SMEs 2013
0
500000
1000000
1500000
2000000
2500000
3000000
Japón, Korea y Taiwan
Europa (países AECM)
Latinoamerica EEUU Canada
Japón, Korea y Taiwan
28%
Europa (países AECM)
31%
Latinoamerica 29%
EEUU 10%
Canada 2%
Source: Own elaboration
Heterogeneous guarantee operators
© Pablo Pombo
A GLOBAL VISION : GUARANTEES IN PORTFOLIO / GDP 2013
0,00
0,01
0,02
0,03
0,04
0,05
0,06
Source: Own elaboration Latin American
Heterogeneous guarantee operators
© Pablo Pombo
Diagnosis - conceptual framework
Summary: • Globally
• Diagnosis - conceptual framework
• Classification and characterization • Relations with financial institutions and SME • 2013 statistics: situation, trends, perspectives and challenges
© Pablo Pombo
YES … WITH DIAGNOSIS … GUARANTEE COVERAGE PROBLEM OF ACCESS TO CREDIT FOR THE SME
BASILEA I 1988 BASILEA II 2004 BASILEA III 2010-2015
The guarantee coverage
STIGLITZ & WEIS 1982-1986 Information asymmetry Adverse selection and moral hazard
The financial systemoptimizes itsmanagement aboutthe quality of itsguarantee coverage
The Classification of risks according to the classification and weighting of guarantee coverage
CGSsWE HAVE
PRODUCT ? WATH PRODUCT ?
© Pablo Pombo
“Face” = Bank
“Cross” = Guarantee Systems
STATE POLICY: GUARANTEE SYSTEM (CGS) REGULATED AND SUPERVISED INTEGRATED IN THE FINANCIAL SYSTEM
The credit
The coin 2“sides”
SUBSYSTEM OF THE FINANCIAL SYSTEM
It is regulated and supervised by the regulator and supervisor of the financial system
It must also beregulated/supervised
Source: Own elaboration
WATH PRODUCT?
CGS
© Pablo Pombo
Credit to the private sector as a percentage of GDP, indicators The World Bank's development world in 2012
Inclusión financiera en América Latina y Estados Unidos 2013
Cue
nta
en u
na
inst
ituci
ón fi
nanc
iera
Aho
rró e
n si
stem
a fo
rmal
o in
form
al
Aho
rró e
n un
a in
stitu
ción
fina
ncie
ra
Cré
dito
en
una
inst
ituci
ón fi
nanc
iera
Con
tarje
ta d
e cr
édito
Alg
ún ti
po d
e cr
édito
fo
rmal
EE. UU. 88 67 50 20 62 82
Uruguay 24 17 6 15 27 42
Brasil 56 21 10 6 29 36
Chile 42 27 12 8 23 21
Argentina 33 24 4 7 22 29
República Dominicana
38 37 16 14 12 26
Perú 21 29 9 13 10 23
Costa Rica 50 41 20 10 12 22
Colombia 30 33 9 12 10 22
Paraguay 22 18 10 13 9 22
Guatemala 22 25 10 14 7 21
Ecuador 37 30 15 11 10 21
México 27 27 7 8 13 21
Panamá 25 35 13 10 11 21
Bolivia 28 44 17 16 4 20
Honduras 21 22 9 7 10 17
Venezuela 44 28 17 2 10 12
Nicaragua 14 26 7 8 2 10
Haití 22 32 18 8 2 10
El Salvador 14 26 13 4 5 9
Fuente: Encuesta de Inclusión Financiera (Global Findex) del Banco Mundial.
A difficult environment but...
© Pablo Pombo
YES … WITH DIAGNOSIS …
Guarantee systems (CGSs) as a solution: strategies and general principles of implementation of a guarantee scheme (CGS) … yes … with diagnosis
…
© Pablo Pombo
GRANTING
GUARANTEE COVERAGE
BUT … THERE IS A SECOND STEP …
YES … WITH DIAGNOSIS … GUARANTEE COVERAGE DETERMINES THE GRANTING
FIRST STEP: ANALYSIS
There are entrepreneur, company and viability
© Pablo Pombo
YES … WITH DIAGNOSIS … GUARANTEE COVERAGE DETERMINES THE GRANTING
The financial institution can analyze and conclude that there is an entrepreneur and business, and viability, but ...
Needs / requires of a guarantee coverage for the approval decision
IF THE GUARANTEE OF
THE CGS IS "VALID" IN THE
FINANCIAL SYSTEM
ACCESS TO
CREDIT
1
2
CGSs
THE CGSs WE HAVE
PRODUCT ?
© Pablo Pombo
YES … WITH DIAGNOSIS … GUARANTEE COVERAGE PROBLEM OF ACCESS TO CREDIT FOR THE SME
BASILEA I 1988 BASILEA II 2004 BASILEA III 2010-2015
The guarantee coverage
STIGLITZ & WEIS 1982-1986 Information asymmetry Adverse selection and moral hazard
The financial system optimizes its management about the quality of its guarantee coverage
The Classification of risks according to the classification and weighting of guarantee coverage
CGSs WE HAVE
PRODUCT ? WATH PRODUCT ?
© Pablo Pombo
The requirements of equity and provisions (technical reserves) are established according to international rules
The financial system optimizes its management about the quality of its assets coverage
Bank for International Settlements (BIS) Basel I, II y III
The guarantee is a strategic value for financial institutions: their balance, accounts of results and requirements of coverage of the equity and provisions
For guarante coverage of less quality higher requirements of equity and provisions if it is of higher quality
The Classification of risks according to the classification and weighting of guarantee coverage
Source: Own elaboration
DIAGNOSIS OF THE PROBLEM: International rules may represent bigger difficulties and unwanted effects
WATH PRODUCT ?
CGSs WE HAVE
PRODUCT ?
© Pablo Pombo
YES … WHIT STRATEGIES …
Guarantee systems (CGSs) as a solution: strategies and general principles of implementation of a guarantee scheme (CGS) … yes … with strategies
…
© Pablo Pombo
State Policy: promoting access to finance for employer (the GS can not be questioned, so that it can develop and remain strong and stable – it is not a fad- to be fully integrated into the financial system)
"Strategic Alliance" and full consensus among the actors involved (public authorities, financial institutions and micro and SMEs and their organizations) in the legislative and operational development of the GS that satisfies the legitimate interests of all parties.
SOLUTION: Guarantee systems (CGSs)
Transfer of credit risk from the bank to guarantee systems (CGSs)
Strategies and general principles of implementation of a CGS
GUARANTEE SYSTEMS (CGSs) AS A SOLUTION: strategies and general principles of implementation of a guarantee scheme CGS
© Pablo Pombo
“Face” = Bank
“Cross” = Guarantee Systems
STATE POLICY: GUARANTEE SYSTEM (CGS) REGULATED AND SUPERVISED INTEGRATED IN THE FINANCIAL SYSTEM
The credit
The coin 2 “sides”
SUBSYSTEM OF THE FINANCIAL SYSTEM
It is regulated and supervised by the regulator and supervisor of the financial system
It must also be regulated/supervised
Source: Own elaboration
WATH PRODUCT?
CGS
© Pablo Pombo
THE GUARANTEE SYSTEM OR SUBSYSTEM OF THE FINANCIAL SYSTEM
GUARATEE SYSTEM (CGS)
ENVIRONMENT
Financial guarantee Technical guarantee Services Rated and weighted guarantees = effect mitigation equity and provisions for the IFI´S
ENVIRONMENT
•Material resources (equipment, etc.) •Human resources •Financial resources •Intangible resources (regulation, supervision, knowledge, "know - how", etc.) Control Regulation
INPUTS OUTPUTS
unrated,
unweighted guarantee coverage
Source: Own elaboration
SUBSYSTEM OF THE
FINANCIAL SYSTEM
WHAT PRODUCT?
© Pablo Pombo
BANK
CREDIT
GUARANTEE SCHEMES - CGS
COUNTER-GUARANTEE
COUNTERGUARANTEE
EQUITY REQUIREMENT REQUIREMENT OF PROVISIONS
EQUITY REQUIREMENT REQUIREMENT OF PROVISIONS
XX % COVERAGE TO CGS
FOR XX % COVERAGE
TO CGS
EQUITY REQUIREMENT REQUIREMENT OF PROVISIONS
Source: Own elaboration
STATE POLICY: OPTIMAL MODEL
FOR XX % WITHOUT
COVERAGE OF CGS
FOR XX % WITH
COVERAGE CGS
WITHOUT COUNTERGUARANTEE
REQUIREMENT OF PROVISIONS
EQUITY REQUIREMENT
© Pablo Pombo
GUARANTEE SYSTEMS AS A SOLUTION: Approach Shift
The fully integration of the guarantee system (CGS) in the financial system means a major approach shift: it is about taking the employer to the credit, under the best conditions from the guarantee coverage by the guarantee system (CGS).
By the mortgage Law citizens generally can access, with that coverage, to the financing of a home or other real state .. Through the guarantee system (CGS) the employer can access
to the financing of their business
Mortgages
Guarantee Systems
OLD APPROACH
THE GUARNTEE IS A PRODUCT
FOR SMEs
NEW APPROACH
THE
GUARNTEE IS A PRODUCT
FOR THE BANK
The GUARANTEE
SYSTEMS (CGS) is for
SMEs
© Pablo Pombo
STRATEGIC ALLIANCE GUARANTEE SYSTEM (CGS): BENEFITS AND IMPACT
Source: Own elaboration “EVERYBODY WINS”
SME PUBLIC ADMINISTRATION FINANCIAL INSTITUTION Better access to credit Promotion sme, Guarantee coverage liquid Low rate and term Increase companies & invest. Guarant Qualified & weighted Access technical guarantees Employment increases Lower provision & equity Advice and information finac. Increase competitiveness Increased customer base Enterprise Network Integrat. More formality Analytical support Improving competitiveness Improved tax collection Lower cost of monitoring Supporting growth Channeling policy Backed securitizat. portfolio Increased payment culture Greater transpar./efficiency Increased financial culture
© Pablo Pombo
Classification and characterization
Summary: • Globally • Diagnosis - conceptual framework
• Classification and characterization
• Relations with financial institutions and SME • 2013 statistics: situation, trends, perspectives and challenges
© Pablo Pombo
Diagnosis of the problem of
accessto finance for
MSMEs
Identification of structural
and operational variables
Classification of the guarantee system (CGSs) models
Impact assessment of the models
CLASSIFICATION AND CHARACTERIZATION OF THE GUARANTEE SYSTEMS (CGSs)
Heterogeneous operators guarantee
© Pablo Pombo
GUARANTEE SYSTEMS (CGSs)
THE GUARANTEE OPERATOR SUPPORTS THE GUARANTEE COVERAGE ON ITS EQUITY /
BALANCE
THE GUARANTEE OPERATOR DOES NOT SUPPORTS THE
GUARANTEE COVERAGE ON ITS EQUITY / BALANCE
SCHEMESON MERCANTILE
COMPANIES
SCHEMES ON PUBLIC INSTITUTIONS
ADMINISTRATORS OFGUARANTEE FUND
ADMINISTRATORS OFGUARANTEE TRUSTS
Source: Own elaboration
75%
Empirical classification of the guarantee systems / schemes in Latin-American - 2013 IDB NT - 503 study
Heterogeneous operators guarantee
Operator of the guarantee is the entity that develops and executes the activity for the granting and formalization ofguarantee coverage, real and effective, according to rules of operation.
• To decide or choose on that model of guarantee system (CGS) to apply, we need to know that types or models of guarantee system (CGS) exist.
• Than usual in the studies and analyses carried out is to address operational issues but not the strategic passing, before anything, knowing that there are models to confront and solve the problem of access to funding for SMEs through guarantee schemes (CGSs).
• Therefore the focus of work passes through delimit two issues that should be clear to be well located
1. One corresponds to the conceptual classification and characterization of (what has been done on European and Latin American samples) guarantee systems (CGSs), and other
2. On the implementation of the guarantee systems (CGS) <implemented in Latin America, in several countries in three phases>
CLASSIFICATION AND CHARACTERIZATION OF THE GUARANTEE SYSTEMS (CGSs)
© Pablo Pombo
Diagnosis of the problem of
access to finance for
MSMEs
Identification of structural
and operational variables
Classification of the guarantee system (CGSs) models
Impact assessment of the models
CLASSIFICATION AND CHARACTERIZATION OF THE GUARANTEE SYSTEMS (CGSs)
Heterogeneous guarantee operators
© Pablo Pombo
Motivation and diagnosis
Objectives of the policy
Identification and socialization of the guarantee system (CGS) model
Implementation of the legal, regulatory and supervisory framework
Impact assessment of the scheme
Implementation of guarantee scheme (CGS)
DESIGN AND IMPLEMENTATION OF THE GUARANTEE SYSTEM (CGS)
© Pablo Pombo
Micro plane Needs of improvement in credit conditions
Acess Factor Dimension - microcredit Lifecycle phase - entrepreneurship - growth Nature of the business - intangible assets Profile of the operation - medium-long term
Macro plane Market does not ensure an efficient credit to economy
The international rules of the financial system produce unintended negative effects on the financing of SMEs
Malfunction of the institutions Reduction of banking activities in the context of the crisis
Intermediate plane Incomplete offer in less attractive segments
Disadvantaged regions Weak sectors Emerging activities
Different approaches to public policy: The guarantee instrument of public policy What level? What objectives?
The right access
to credit …
Heterogeneous guarantee operators
© Pablo Pombo
How to do it? Programa de garantía – Agencias Públicas – Aval del Estado – Fondo/Fideicomiso de garantía Socieada de Garantia – Sociedad de Garantía Recíproca/Mútua – Sociedad/Fondo de Reafianzamiento
Guarantee operator is the entity that develops and executes the activity for the granting and formalization of guarantee coverage, real and effective, according to rules of operation.
Heterogeneous guarantee operators
© Pablo Pombo Source: Pablo Pombo’s doctoral thesis and own elaboration
GUARANTEE SYSTEMS/SCHEMES (CGSs): MODELS / OPTIONS - European study 2006
The choice of the policy of Guarantee
System has two ways
GUARANTEE SOCIETY Mixed Systems (private-
public) GUARANTEE PROGRAM
Public systems
How to do it?
Heterogeneous guarantee operators
© Pablo Pombo
GUARANTEE SYSTEMS / SCHEMES (CGS)
GUARANTEE SOCIETY GUARANTEE PROGRAM
Trading Guarantee companies (corporate)
non-mutual
Mutual Guarantee Societies (MGS)
Guarantee Programs (managed by public institutions specialized in financing / promotion or development of SMEs)
Guarantee Programs (managed by public agencies or institutions delegated by it)
Companies with business participation
Source: Own elaboration
Guarantee societies are societies, which can have different legal personalities, that have own resources of its shareholders, public or private, and operate under the corporate commercial or banking rules/law,, and / or legislation of the activity itself ... Even though were called "Guarantee Fund"
Empirical classification of the guarantee systems / schemes (CGSs) in Europe (UNICAJA economic research award 2007)
Heterogeneous guarantee operators
© Pablo Pombo
GUARANTEE SYSTEMS (CGSs)
THE GUARANTEE OPERATOR SUPPORTS THE GUARANTEE COVERAGE ON ITS EQUITY /
BALANCE
THE GUARANTEE OPERATOR DOES NOT SUPPORTS THE
GUARANTEE COVERAGE ON ITS EQUITY / BALANCE
SCHEMES
ON MERCANTILE COMPANIES
SCHEMES ON
PUBLIC INSTITUTIONS
ADMINISTRATORS OF
GUARANTEE FUND
ADMINISTRATORS OF GUARANTEE TRUSTS
Source: Own elaboration
75%
Empirical classification of the guarantee systems / schemes in Latin-American - 2013 IDB NT - 503 study
Operator of the guarantee is the entity that develops and executes the activity for the granting and formalization of guarantee coverage, real and effective, according to rules of operation.
Heterogeneous guarantee operators
© Pablo Pombo
SG.1) Guarantee society (Trading Company)
Financing
Request of Guarantee
Grants guarantee SG.2) Mutual Guarantee society (the employer participates in guarantee society by providing resources): MGS
Request of credit
MGS Guarantee Society
Public resource in counter-guarantee
The resource is in the capital
A variant is the Guarantee Society: the SGR or SGM with
business involvement
The guarantee is granted by a corporation that takes the risk on its
assets
BASIC OUTLINE OF THE PERFORMANCE OF A GUARANTEE SOCIETY
COMPANY - SME
BANK
Source: Own elaboration
CERSA, SA
Guaraentee operator support the guarantee coverage in his patrimony / balance
Heterogeneous guarantee operators
© Pablo Pombo
The resource is usually in a Autonomous public liquid resource (Fund or Trust of Guarantee)
Autonomous public liquid assets (Fund of Guarantee)
A institution manages the resource: Public Bank, Development Agency, public body, trust, etc..
Financing / Credit
Grants Guarantee
COMPANY - SME
Public Budget
Request of credit
Request of Guarantee
Source: Own elaboration
BASIC OUTLINE OF THE PERFORMANCE OF A GUARANTEE PROGRAM
BANK
The guarantee is operated by an "institutional" that manages a public autonomous liquid resource and does not supports the guarantee coverage in his patrimony / balance
FG
Heterogeneous guarantee operators
© Pablo Pombo
PG 54%
SG 46%
% ENTITIES
PG 77%
SG 23%
% SYSTEMS
Source: Own Elaboration
SHARE IN % OF ENTITIES, SMEs AND GUARANTEES IN PORTFOLIO BY MODEL (LATIN AMERICA)
Year 2013.
PG 81%
SG 19%
% GUARANTEES IN PORTFOLIO
PG 71%
SG 29%
% SMEs
PG = GUARANTEE PROGRAM: ADMINISTRADOR OPERATOR
SG = GUARANTEE SOCIETY: GUARANTEEING OPERATOR
Heterogeneous operators guarantee
© Pablo Pombo
Complementarity in the offer of guarantees
GUARANTEE SOCIETY (corporativas, SGR, SGM, fundaciones)
Counter-guarantee
• Counter-
guarantee: Public programs of “second floor” for mixed systems (private - public)
• Public programs • Highly specialized • Operators does not
supports the guarantee coverage on its equity / balance <administers a resource liquid autonomous>
• Models can coexist in time being desirable is to complement
• Greater opportunity to meet the expectations of the plaintiffs of financing have all guarantees instruments appropriate to each situation
• Mixed system (SME and private-public sector)
• Professional guarantee operators assume the guarantee coverage in his patrimony/balace
• Negotiating conditions of credit with IFI´S
© Pablo Pombo
Relations with financial institutions and SME
Summary: • Globally • Diagnosis - conceptual framework • Classification and characterization
• Relations with financial institutions and SME
• 2013 statistics: situation, trends, perspectives and challenges
© Pablo Pombo
PUBLIC SECTOR
ENTREPRENEURS
FINANCIAL
SECTOR
GUARANTEE SYSTEM
(CGS)
Historical-Instrumental View of the Guarantee Systems (CGSs)
Catalyst
Source: Own elaboration
“EVERYBODY WINS”
© Pablo Pombo
FINANCIAL SECTOR
ENTREPRENEURS
GUARANTEE SYSTEM
CGS
PUBLIC SECTOR
Operational characteristics relevant to the SMEs (term, cost savings, amount)
Who is directed the guarantee systems (CGS) in its expansion or extension? Efficient relationship with financial institutions? with SME?
Structural characteristics : regulation and supervision, mitigation of own resources and provisions. Relevant operational characteristics for Banking - Credit unions, etc. (Coverage, responsibility, form and payment, delegation of the analysis and decision)
A greater extension implies a expanded guidance to mitigation and operational characteristics for Banking - Credit unions, etc.
Guarantee coverage is for the Bank
The guarantee
coverage is for the SME
Source: Own elaboration
© Pablo Pombo
A REGULATORY FRAMEWORK... GOOD PROFILING... WELL DIRECTED... TO GET PRODUCT … Change of approach: for the Bank... IF... coop. CTO. …
1. Structural characteristics for the IF: legal certainty, regulation and supervision, mitigation equity and provisions.
2. Relevant operational characteristics for the IF (coverage, liability, payment, delegation analysis and decision) - Coverage: 100% ? - Operational guarantee:
•Solidary or subsidiary? •Automatic or semi-automatic? •Analysis - decision would delegate? •Do pay failed or non-payment? •Do I pay first requirement or conditioned?
? Do we have product?
The guarantee coverage is for the bank … IF … coop. cto. …
?
© Pablo Pombo
Recognition of financial activity: financial activity (subsystem of the financial
system) Regulation and financial supervision as integration in the financial system:
regulation and supervision by the Superintendence of the financial system (SBEF) Regime of authorizations to operate, manage, etc.: Resources: capitalization (in SGR society of variable capital and FPT) to develop
and comply with the restrictions on growth and creation FDSGR Government structure: organs, representing and votes Other legal and/or corporate issues Structuring of a counter-guarantee (reavaladora) system: key factor in mixed
systems of the guarante systems
A REGULATORY FRAMEWORK... GOOD PROFILING ... WELL DIRECTED ... TO GET PRODUCT … PROFILE OF THE REGULATORY FRAMEWORK OF THE GUARANTEE SYSTEM (CGS) …
- Guarantee: product regulated vs unregulated product - Product accepted by the stakeholder: banking (IF) and SMEs
© Pablo Pombo
2013 statistics: situation, trends, perspectives and challenges
Summary: • Globally • Diagnosis - conceptual framework • Classification and characterization • Relations with financial institutions and SME
• 2013 statistics: situation, trends, perspectives and challenges
© Pablo Pombo
EVOLUTION 1998-2013 IN LATIN AMERICA SMEs
0
500000
1000000
1500000
2000000
2500000
3000000
1998 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Saldo de Pymes
Pymes anuales
Data from FINANCIERA RURAL – SAGARPA (Mexico) not available
© Pablo Pombo
SITUATION OF THE GUARANTEE SYSTEMS (CGSs) LATIN AMERICA &
IBEROAMERICA (2013): FROM KNOWLEDGE OF THE ACTIVITY
© Pablo Pombo
CONCEPT 2000 2005 2010 2011 2012 2013 Increase00/12
NUMBER OF MSMEs 358.108 879.199 2.261.977 2.477.080 2.653.647 2.743.026 667%CURRENT GUARANTEES
(MILLIONS US$) 2.258 4.836 19.236 19.794 23.870 26.692 1082%CTO IN PORTFOLIO (MILL
US$) 3.675 7.653 30.737 32.605 39.449 44.314 1106%
COMPARATIVE YEARS 2000, 2005, 2010, 2011, 2012 and 2013 IN LATIN AMERICA
Source: Own elaboration
667%1106 %
1082 %
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
AÑO 2000
AÑO 2005
AÑO 2010
AÑO 2011
AÑO 2012
AÑO 2013
NUMBER OF MSMEs
05.000
10.00015.00020.00025.00030.00035.00040.00045.00050.000
AÑO 2000 AÑO 2005 AÑO 2010 AÑO 2011 AÑO 2012 AÑO 2013
GARANTÍAS VIVAS (MILLONES DE US$)
SALDO CTO MOVILIZADO (MILL DE US$)
© Pablo Pombo
0
2
4
6
8
10
12
14
SRMSRNPGSG
EVOLUTION OF THE GUARANTEE SYSTEMS / SCHEMES (CGS) IN IBEROAMERICA
Source: Pablo Pombo. Own Elaboration.
© Pablo Pombo
Programas de Garantías
Sin Esquemas de Garantías o sininformación disponible
Sociedades de Garantía Mutualistas
Sociedades de Garantía MercantilesSocied. Merc. y otras ent. reg.
Sociedades de Garantía Mutualistas
Programas de Garantías
Sin Esquemas de Garantías
GUARANTEE SYSTEMS (CGSs) IN LATIN AMERICA & IBEROAMERICA
Source: Own elaboration
Guarantee society (legal)
Guarantee society (mutual)
Guarantee program
Without guarantee scheme
Heterogeneous guarantee operators
© Pablo Pombo
PG 54%
SG 46%
% ENTITIES
PG 77%
SG 23%
% SYSTEMS
Source: Own Elaboration
SHARE IN % OF ENTITIES, SMEs AND GUARANTEES IN PORTFOLIO BY GUARANTEE SYSTEM (CGSs) MODEL IN LATIN AMERICA
Year 2013.
PG 81%
SG 19%
% GUARANTEES IN PORTFOLIO
PG 71%
SG 29%
% SMEs
PG = GUARANTEE PROGRAM: ADMINISTRADOR OPERATOR
SG = GUARANTEE SOCIETY: GUARANTEEING OPERATOR
Heterogeneous guarantee operators
© Pablo Pombo
CONCEPT 2000 2005 2010 2011 2012 2013 Increase 00/12
NUMBER OF MSMEs 358.108 879.199 2.261.977 2.477.080 2.653.647 2.743.026 667% CURRENT GUARANTEES
(MILLIONS US$) 2.258 4.836 19.236 19.794 23.870 26.692 1082% CTO IN PORTFOLIO (MILL
US$) 3.675 7.653 30.737 32.605 39.449 44.314 1106%
COMPARATIVE YEARS 2000, 2005, 2010, 2011, 2012 and 2013 IN LATIN AMERICA
Source: Own elaboration
667% 1106 %
1082 %
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
AÑO 2000
AÑO 2005
AÑO 2010
AÑO 2011
AÑO 2012
AÑO 2013
NUMBER OF MSMEs
0 5.000
10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000 50.000
AÑO 2000 AÑO 2005 AÑO 2010 AÑO 2011 AÑO 2012 AÑO 2013
GARANTÍAS VIVAS (MILLONES DE US$)
SALDO CTO MOVILIZADO (MILL DE US$)
© Pablo Pombo
EVOLUTION 1998-2013 IN LATIN AMERICA ACTIVITY
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
50000000
Rec. Perm.
Garantias Vivas
Crédito movilizado
1106 %
Data from FINANCIERA RURAL – SAGARPA (Mexico) not available
1082 %
© Pablo Pombo
EVOLUTION 1998-2013 IN LATIN AMERICA SMEs
0
500000
1000000
1500000
2000000
2500000
3000000
1998 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Saldo de Pymes
Pymes anuales
Data from FINANCIERA RURAL – SAGARPA (Mexico) not available
667%
© Pablo Pombo
% DISTRIBUTION BY YEARS OLD OF THE GURANTEE SYSTEMS / SCHEMES (CGSs) IN LATIN AMÉRICA (2013)
Source: Own Elaboration
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
<5 años 5-9 años 10-14 años 15-25 años >25 años
25,8%
12,9% 25,8% 19,4%
16,1%
The 38,7% of guarantee
systems (CGSs) is less than 10 years
old and a 64,5% less than 15 years
old
Heterogeneous guarantee operators
© Pablo Pombo
DISTRIBUTION IN % OF ENTITIES, SME AND GUARANTEE AND CREDIT IN PORTFOLIO BY MODELS IN LATIN AMERICA 2013
Source: Own elaboration
4% 8%
88%
Nº Entities MEXICO CENTROAMERICA AMERICA DEL SUR
24%
1% 75%
Guarantees portfolio MÉXICO CENTROAMÉRICA AMÉRICA DEL SUR
12% 7%
81%
SMEs MÉXICO CENTROAMÉRICA AMÉRICA DEL SUR
33%
1%
66%
Credit in portfolio MÉXICO CENTROAMÉRICA AMÉRICA DEL SUR
Heterogeneous guarantee operators
© Pablo Pombo
ACTIVITY AGRICULTURAL GUARANTEE SYSTEMS 2013
5%
95%
Nº ENTITIES SECTORIALES AGRÍCOLAS RESTO DE LATINOAMÉRICA
34%
66%
SMEs SECTORIALES AGRÍCOLAS RESTO DE LATINOAMÉRICA
19%
81%
GUARANTEES PORTFOLIO SECTORIALES AGRÍCOLAS RESTO DE LATINOAMÉRICA
16%
84%
CREDIT IN PORTFOLIO SECTORIALES AGRÍCOLAS RESTO DE LATINOAMÉRICA
© Pablo Pombo
Iberoamerican Distribution 2013
71%
29% GUARANTEES PORFOLIO 2013
LATINOAMÉRICA ESPAÑA Y PORTUGAL
99%
1%
% MSMEs 2013
LATINOAMÉRICA ESPAÑA Y PORTUGAL
ACTIVITIES OF GUARANTEE SYSTEMS (CGSs) IN LATIN AMERICA AND ESPAÑA-PORTUGAL 2013
MÉXICO 3,31%
CENTRO AMÉRICA
5,98%
AMÉRICA DEL SUR 67,77%
ESPAÑA 19,83%
PORTUGAL 3,31%
% ENTITIES
© Pablo Pombo
Geographical distribution Latin
America 2013
MÉXICO 17,48%
CENTRO AMÉRICA
0,47%
AMÉRICA DEL SUR 53,12%
ESPAÑA 17,94%
PORTUGAL 10,98%
% GUARANTEES PORFOLIO 2013
MÉXICO 12,65%
CENTRO AMÉRICA
2,84%
AMÉRICA DEL SUR 82,81%
ESPAÑA 1,02%
PORTUGAL 0,47%
% MSMEs 2013
MÉXICO 3,31%
CENTRO AMÉRICA
5,98%
AMÉRICA DEL SUR 67,77%
ESPAÑA 19,83%
PORTUGAL 3,31%
% ENTITIES
En Mexico no se dispone de datos de FINANCIERA RURAL - SAGARPA
© Pablo Pombo
GUARANTEE PORTFOLIO (2013) (millons US$) Specially significant Brazil, Spain along with Mexico, Colombia, Portugal and Chile - 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000 9.000 10.000
MEXICO
EL SALVADOR
COSTA RICA
ARGENTINA
BOLIVIA
BRASIL
CHILE
COLOMBIA
ECUADOR
PERU
URUGUAY
VENEZUELA
ESPAÑA
PORTUGAL
6.662
134
49
950
13
9.297
4.541
4.948
7
164
35
286
6.836
4.183
Data from FINANCIERA RURAL – SAGARPA (Mexico) not available
© Pablo Pombo
0 200.000 400.000 600.000 800.000 1.000.000 1.200.000 1.400.000 1.600.000
MEXICO
EL SALVADOR
COSTA RICA
ARGENTINA
BOLIVIA
BRASIL
CHILE
COLOMBIA
ECUADOR
PERU
URUGUAY
VENEZUELA
ESPAÑA
PORTUGAL
325.134
188.164
4.035
26.417
2.137
426.535
223.742
1.456.437
2.380
74.748
3.520
9777
131.317
46.039
PORTFOLIO MICRO AND SME (2013)
In nº of micro and SME guaranteed highlights Colombia and Brasil, México y El Salvador
Data from FINANCIERA RURAL – SAGARPA (Mexico) not available
© Pablo Pombo
GUARANTEE AND CREDIT IN PORTFOLIO (2013) (MILLIONS US$)
Source: Own elaboration
Specially significant México, Brasil,
Portugal, Colombia, España and Chile
© Pablo Pombo
0,0000 0,0020 0,0040 0,0060 0,0080 0,0100 0,0120 0,0140 0,0160 0,0180 0,0200
MEXICO EL SALVADOR
COSTA RICA ARGENTINA
BOLIVIA BRASIL
CHILE COLOMBIA
ECUADOR PERU
URUGUAY VENEZUELA
ESPAÑA PORTUGAL
0,0053
0,0055
0,0010
0,0019
0,0005
0,0041
0,0164
0,0130
0,0001
0,0008
0,0007
0,0008
0,0048
0,0191
GUARANTEE IN PORTFOLIO / GDP (2013)
Specially significant Portugal, Chile, Colombia, España, El Salvador, México and Brasil
Data from FINANCIERA RURAL – SAGARPA (Mexico) not available
© Pablo Pombo
THE GUARANTEE SYSTEMS (CGSs) IN LATIN AMERICA: TRENDS, PROSPECTS
AND CHALLENGES FROM KNOWLEDGE OF THE ACTIVITY
© Pablo Pombo
Future important growths and developments. - Major expansion and high % of growth - Impact assessment
.
Continuity of the important role of the State in the implementation and development, coexisting with private participation that is increasingly expanding and relevant.
Guarantee program with an important boost to MGS’s. It involves methods of capitalization and specific operational profiles.
Implementation of regulatory frameworks and quality and efficient supervision.
Integration of the financial system. Scoring and weighting of guarantees and national counter-guarantees in the mitigation of own resources and provisions for IFI’S and MGS’s.
Consolidation of initiatives by multilateral organizations of supranational counter-guarantee
• Extension of experiences such as FLAG CAF, CII, FG MERCOSUR. • And national: FOGAPE , GF Brasil, FOGAPYME, FONPYME, etc.
TRENDS PROSPECTS
TRENDS AND PROSPECTS
© Pablo Pombo
CHALLENGES - SUMMARY
External • Basel II and its implementation
framework in the SG, as well as recognition of the coverage of the SG
• Establish regulatory frameworks of quality (legal certainty and permanence) and efficient supervision (control)
• Achieve frameworks of stable long-term partnerships with the public, financial and corporate sectors.
• International Financial Crisis
Internal • Practice transparency to transmit a certain
knowledge of the legal and operational realities of the SG
• Encourage internal decisions towards the integration into the financial system of the SG
• Strengthen the role of MSMEs and others of the private sector in the SG
• Optimize management: learned lessons (independent and professional management; tools technologically agile and efficient , implementation of quality procedures)
© Pablo Pombo
- Independent and professional management: -For analysis and granting of the guarantee. -To implement the best practices that promote sustainable guarantee schemes in the long run. -To combine social work in support of business and economic development.
OPTIMIZE MANAGEMENT
Technologically agile and efficient management tools that enable a comprehensive quality management and achieve the objectives of the SG.
Implementación de procedimientos en calidad que aseguren y optimicen los criterios y procedimientos de análisis, otorgamiento, control y seguimiento de los riesgos, así como los de información para el control de gestión.
Fuente: Elaboración propia.
CHALLENGES INTERNAL - OPTIMIZING MANAGEMENT IN CGS, LESSONS LEARNED:
© Pablo Pombo
REGAR Red Iberoamericana de Garantías www.redegarantias.com
AECM Asociación Europea de Caución Mutua www.aecm.be
ACSIC Asian Credit Supplementation Institution Confederation www.acsic.org/acsic/index.jsp
ALIGA Asociación Latinoamericana de Instituciones de Garantía www.aligalat.org/index.html
"Guarantee systems for micro and SMEs in a globalized economy" www.redegarantias.com
"Guarantee systems in Latin America: experiences and recent developments" www.redegarantias.com y www.alide.org.pe
"Conceptual contributions and characteristics for classifying guarantee systems / schemes“ http://www.redegarantias.com/archivos/web/ficheros/2010/edicion_ii_premio_unicaja_investigacion_economica_english_version).pdf “A guarantee systems classification: the Latin American experience” http://www.iadb.org/es/publicaciones/publicaciones,4126.html?doctype=Technical%20Notes&docTypeID=TechnicalNotes&searchLang=&keyword=pombo&selectList=All&topicDetail=0&tagDetail=0&jelcodeDetail=0
LINKS
© Pablo Pombo
“WHOEVER DOMINATES THE GUARANTEE DOMINATES THE CREDIT”
© Pablo Pombo
Recent development of guarantee schems across the world: Africa and America 13h45 -14h 45
Invitation to the public to ask questions
Panel: “Global benchmarking and cross learning” 11,45 – 13,00:
“Support and opportunities for innovative and
growing SMEs from a Latin American perspective”
