AECM Annual Event 2015 - Pablo Pombo

© 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
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 Forceon "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

© 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%

© 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

© Pablo Pombo
Diagnosis - conceptual framework
Summary:
• Globally
• Diagnosis - conceptual
framework
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 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
“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
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
Cuentaenuna
instituciónfinanciera
Ahorróensistema
formaloinformal
Ahorróenuna
Créditoenuna
Contarjetadecrédito
Algúntipodecrédito
formal
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
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
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
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
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
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
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.) ControlRegulation
INPUTS OUTPUTS
unrated,
unweighted
guarantee
coverage
SUBSYSTEM
OF THE
FINANCIAL
SYSTEM
WHAT
PRODUCT?

© Pablo Pombo
BANK
CREDIT
GUARANTEE SCHEMES - CGS COUNTER-GUARANTEE
COUNTERGUARANTEE
EQUITY REQUIREMENT REQUIREMENT OF
PROVISIONS
PROVISIONS
XX % COVERAGE TO CGS
FOR XX %
COVERAGE
TO CGS
PROVISIONS
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
“EVERYBODY WINS”
SME PUBLIC ADMINISTRATION FINANCIALINSTITUTION
Betteraccesstocredit Promotionsme, Guaranteecoverageliquid
Lowrateandterm Increasecompanies &invest. GuarantQualified & weighted
Accesstechnicalguarantees Employment increases Lowerprovision& equity
Advice and informationfinac. Increasecompetitiveness Increasedcustomerbase
EnterpriseNetwork Integrat. Moreformality Analyticalsupport
Improvingcompetitiveness Improvedtaxcollection Lowercostof monitoring
Supporting growth Channelingpolicy Backedsecuritizat. portfolio
Increasedpaymentculture Greatertranspar./efficiency Increasedfinancialculture

© Pablo Pombo
Classification and characterization
Summary:
• Globally
• Classification and
characterization
challenges
© 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 operators guarantee
© Pablo Pombo
GUARANTEE
SYSTEMS (CGSs)
THE GUARANTEE OPERATOR
SUPPORTS THE GUARANTEE
COVERAGE ON ITS EQUITY /
BALANCE
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
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.

• 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)

© 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
…

© 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

© Pablo PomboSource: 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?

© 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
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)

© Pablo Pombo
GUARANTEE
SYSTEMS (CGSs)
SUPPORTS THE GUARANTEE
COVERAGE ON ITS EQUITY /
BALANCE
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
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

© Pablo Pombo
SG.1) Guarantee society
(Trading Company)
Financing
Request of
Guarantee
Grants guaranteeSG.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
CERSA, SA
Guaraentee operator support the guarantee coverage in his
patrimony / balance

© 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
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

© 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

© 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
• Relations with financial
institutions and SME
challenges

© Pablo Pombo
PUBLIC
SECTOR
ENTREPRENEURS
FINANCIAL
SECTOR
GUARANTEE
SYSTEM
(CGS)
Historical-Instrumental View of the Guarantee Systems (CGSs)
Catalyst
“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

© 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
• 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
Pymesanuales
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
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
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
0
2
4
6
8
10
12
14
SRM
SRN
PG
SG
EVOLUTION OF THE GUARANTEE SYSTEMS / SCHEMES (CGS) IN
IBEROAMERICA
Source: Pablo Pombo.
Own Elaboration.

© Pablo Pombo
Programas deGarantías
SinEsquemas deGarantías osin
informacióndisponible
Sociedades deGarantíaMutualistas
Sociedades deGarantíaMercantilesSocied. Merc. y otras ent. reg.
Sociedades de Garantía Mutualistas
Programas de Garantías
Sin Esquemas de Garantías
GUARANTEE SYSTEMS (CGSs) IN LATIN AMERICA &
IBEROAMERICA
Guarantee society (legal)
Guarantee society (mutual)
Guarantee program
Without guarantee scheme

© Pablo Pombo
PG
54%
SG
46%
% ENTITIES
PG
77%
SG
23%
% SYSTEMS
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

© 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
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 %
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
667%

© Pablo Pombo
% DISTRIBUTION BY YEARS OLD OF THE GURANTEE SYSTEMS / SCHEMES (CGSs)
IN LATIN AMÉRICA (2013)
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

© Pablo Pombo
DISTRIBUTION IN % OF ENTITIES, SME AND GUARANTEE AND CREDIT
IN PORTFOLIO BY MODELS IN LATIN AMERICA 2013
4% 8%
88%
Nº Entities
MEXICO CENTROAMERICA AMERICA DEL SUR
24%
1%
75%
Guarantees portfolio
MÉXICO CENTROAMÉRICA AMÉRICA DEL SUR
12%
7%
81%
SMEs
33%
1%
66%
Credit in portfolio

© Pablo Pombo
ACTIVITY AGRICULTURAL GUARANTEE SYSTEMS 2013
5%
95%
Nº ENTITIES
SECTORIALES AGRÍCOLAS RESTO DE LATINOAMÉRICA
34%
66%
SMEs
19%
81%
GUARANTEES PORTFOLIO
16%
84%
CREDIT IN PORTFOLIO

© 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

© 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

© Pablo Pombo
GUARANTEE AND CREDIT IN PORTFOLIO (2013)
(MILLIONS US$)
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

© 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_inve
stigacion_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&tagD
etail=0&jelcodeDetail=0
LINKS

© 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”

AECM Annual Event 2015 - Pablo Pombo

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