The Design Of Credit Guarantee Fund For Industry Chain Finance — A Case Study In Hangzhou City

Industrial transformation and upgrading demands the solution to the financing difficulty that medium small and micro-sized enterprises(SMMEs) are facing. This paper suggests establishing a market-oriented credit guarantee fund for industry chain finance, which is jointly funded by core enterprises and government industry investment fund and aimed to guarantee SMMEs of the key industries of Hanghzou City.This work is based on the results of domestic and foreign researches. First, applying game theory model, this paper analyses the lengding situation when credit guarantee fund is implemented in industial chain finance. Then, it describes the advantages this credit guarantee fund has over the existing guarantee system in Hangzhou City. After proving that this credit guarantee fund can generate additionality using a unique dataset and panel data regression, this paper focuses on the basic design components of credit guarantee fund, such as main objectives, capital resource, eligibility criteria, coverage ratio, fee, payment rules, collateral requirement, operational mechanism, credit risk management capacity building and periodic report. Finally, this work assesses the expected financial sustainability of this credit guarantee fund and its critical influences by employing Monte Carlo Simulation.Innovatively, this paper embeds credit guarantee fund in indusrial chain finance. B y doing this, core enterprises, insured firms, commercial banks and the government can all take advantages of both credit guarantee fund and indusrial chain finance. This work also sheds light on the implement founda tion of this credit guarantee fund, its design components and anticipated outcomes from a pre-evaluation perspective. Besides, an original “triple presumptions” approach is adopted to estimate whether the credit guarantee fund in prospect can generate additionality.And promisingly, this study can serve as a reference for policy makers.