The regional impact of the small firms loan guarantee scheme in the United Kingdom

Abstract

Harrison R. T. and Mason C. M. (1986) The regional impact of the small firms loan guarantee scheme in the United Kingdom, Reg. Studies 20, 535–550. The small business Loan Guarantee Scheme was introduced in the UK in 1981 in response to long-standing concern about the problems encountered by small businesses in raising external finance. Although the scheme was introduced nationally its impact has varied among regions. Not unexpectedly, the South East and East Anglia account for the largest proportion of guarantees both by number and by value of loans. This lends superficial support to the argument that nationally-oriented small firms policies may actually contradict the aims of regional policy. However, this conclusion must be qualified in the light of the evidence: once each region's share of the total stock of businesses is taken into account, certain peripheral regions, notably the North West, join the South East/East Anglia region as having more than their expected share of loan guarantees. Evidence p...