The strong dependence of Italian companies on debt capital finds a limit in the availability of assets that can be used as guarantees, usually scarce in some types of companies such as start-ups and more innovative companies. Over the last few years, the economic difficulties of businesses and households, with the consequent deterioration of a substantial portion of loans, have increased the role of guarantees as a factor facilitating the relationship between banks and customers. The presence of guarantees is also necessary to limit the possibility of moral hazard problems. In order to support the production sector in meeting the financial commitments already made, and to overcome the difficulties associated with obtaining new funds, following the outbreak of the crisis, the Government and trade associations adopted a series of measures in favor of SMEs including the strengthening of the Central Guarantee Fund.
Thanks to the "zero weighting" ensured by the State guarantee on the coverage provided by the Fund, the risk for the banks on the portion of the loan guaranteed by this structure is nil, a circumstance which reduces capital requirements and makes this form of guarantee particularly attractive. The absence of real guarantees to place as collateral especially by small companies can also be mitigated by the provision of guarantees by specialized intermediaries (Confidi), whose presence is quite widespread in Italy and in some EU countries. The long crisis that has characterized the Italian economy has made the problems from which the Confidi system had suffered for some time more evident. The operational framework of the Confidi has also been complicated by the loss of the incentive to transform themselves into supervised intermediaries capable of allow the recognition of personal guarantees for the purposes of credit risk mitigation.
Attachments: PA 02_2014 Costagli Russo credit support tools (1).pdf
