The Guarantee System in Spain

There has always been a significant presence of SMEs in Spain, both in numerical terms and as far as their contribution to the development of the economy is concerned; however, it was only in 1978 that the so called Sociedades de Garantìa Recìproca (SGRs) were introduced in the country as non-profit-making mutualistic companies whose mission s to support SMEs through guarantee-granting activities. In spite of their having recent history, Spanish SGRs represent today an interesting interpretation of the mutualistic guarantee institution model, combining the interest of policy makers, SMEs and banks. Today, SGRs are supervised financial intermediaries offering guarantee to their own shareholder, subject to the supervisory activity of the Bank of Spain. The starting point of the analysis conducted in the present work is the legal and regulatory framework of reference, which, on the one hand, defines the scope of action and the operational procedures of the field and, on the other hand, proves useful for comprehending the role assigned by policy-makers to this ‘instrument’ in supporting SMEs. An in-depth examination follows, regarding the morphology of the guarantee system, including considerations of the relations established with enterprises, with public sector (both national and local) and with the banking system. Moreover, after having clarified their operational procedures, the SGRs’ performance has been analysed in order to evaluate the benefit enjoyed by SMES and the economic and financial sustainability of the guarantee institutions. Finally, the last section provides an analysis of the intervention implemented by policy-makers supporting SMEs during the recent crisis, employing SGRs as a means of transmission.