The rollout of

state-guaranteed loans

Executive summary

2022 Annual Public Report

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Defined through legislation and regulation on 23 March 2020, state-guaranteed loans

(PGE) were quickly distributed by banks: of the €143bn in PGEs for nearly 700,000 businesses

at the end of 2021, 70% had been granted from June 2020 onwards. The Court of Accounts

has initiated an assessment of the PGEs, which will be completed in 2022. In its annual public

report, it presents findings on the implementation of the scheme.

A simple and flexible scheme, joint mobilisation by public administration

and banks

Faced with the risk of a credit crunch, European governments wanted to establish

"liquidity bridges" for businesses in the form of state-guaranteed loans. Within the framework

defined by the European Commission on 19 March 2020, France has implemented a system

that is more advantageous in terms of costs for businesses than other countries that have

rolled out comparable schemes, drawing on banking networks to distribute loans and Bpifrance

to manage the guarantee.

Delegating the processing of loan applications to banks was made easier by their good

financial health. The choice of this distribution channel, the design of a simple product and the

implementation of a fluid online application process for a guarantee certificate from Bpifrance

made it possible to roll out the scheme significantly more quickly than in other countries. The

companies interviewed by the Court highlighted the climate of cooperation that characterised

dialogue with the banks and the fluidity of the application process.

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PGE application process

Source: Court of Accounts

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A rapid and large-scale rollout

Most PGEs were taken out in April and May 2020. The pace of subscriptions slowed

significantly in 2021. The scheme has been particularly popular with very small businesses,

which received nearly 88% of loans as of 31 December 2021 (although 37% by amount). The

retail sector is the number one beneficiary by amount, ahead of hotels-cafés-restaurants,

industry and construction.

Guaranteed loans relative to the added value of non-financial corporations businesses

(2019)

Source: data from the ICO (Spain), KfW (Germany), SACE from the Ministry of the Economy (Italy) and

data.gouv.fr (France), listed in the "Covid-19 credit support programmes in Europe's five largest economies",

Julia Andersen, Francesco Papadia, Nicolas Véron

The rate of PGE rejections has remained limited and stable at around 2.9%, a lower level

than usual for cash loans. Nearly two-thirds of rejections led to appeals to the credit mediator,

a free and confidential service provided by Banque de France. The mediator's involvement led

to a positive outcome in half of the cases processed.

A response to the cash flow needs of businesses, a real cost that is still

uncertain for the State

The significant mobilisation of public and private stakeholders has enabled the PGE

scheme to achieve its short-term objectives, consisting of preserving companies' liquidity,

avoiding any credit crunch in a period of great uncertainty and limiting the number of business

failures. However, PGEs have increased the indebtedness of businesses in France, which

already have more bank debt than in other European countries. The situations vary depending

on the company and require careful monitoring in the coming months.