Guarantees used in refundable financing of innovation in micro, small and medium-sized enterprises The regional bank for the development of the extreme South Inova program
Abstract Purpose – Despite the increasing availability of financing programs for innovation, micro, small and medium-sized enterprises (MSMEs) often find it difficult to access credit for their projects. Among the reasons, the lack of the types of guarantees required by financial institutions stands out. Focused on this problem, in 2013, the Regional Bank for the Development of the Extreme South (BRDE) created a policy to stimulate innovation, making the required guarantees for financing operations of innovative companies more flexible: the BRDE Inova Program. This paper aims to analyze the guarantees used in the bank operations since the beginning of the program. Design/methodology/approach – In the first stage of the research, the authors identified the guarantees used in each of the signed contracts, through a documentary survey. Next, semi-structured interviews showed the perceptions of the players involved in the innovation ecosystem of the state of Santa Catarina, regarding aspects related to the guarantees. Specifically, the authors investigated the following elements: strengths and limitations of the programs regarding access to credit for innovation; adequacy of existing guarantee mechanisms. To strengthen the conclusions, they used triangulated data collection in different stages. Findings – The results showed that, on the one hand, the initiative helped BRDE to consolidate itself as the main financing agent of innovation in MSMEs; on the other hand, the need for traditional guarantees still plays a significant role for innovative MSMEs to access credit. Originality/value – In addition to practical implications for the bank and other financing agents’ policies, this paper contributes to fill a gap in the literature on guarantee systems applied to the specificities of knowledge-intensive MSMEs.
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