Mohd Noor Mohd Shariff
Grahame Boocock
Universiti Utara Malaysia
Sintok,
Kedah

Date: 25 October 2001
Time: 4.30-5.00

The overall aim of this paper is to examine the effectiveness of the NPGS , a loan guarantee scheme offered by the Credit Guarantee Corporation (CGC). The focus of this paper is how qualitative research methods were used to investigate finance and economic additionality, as well as the net cost of the Scheme to the Treasury. The methodological approach was to develop in-depth case studies, based on interviews with 15 firms and their financial institutions, as well as key informants from the CGC and other interested bodies. It was recognised that the level of finance and economic additionality could not be easily assessed using quantitative approach such as questionnaires. This research methodology adopted is resource-intensive and it has not previously been adopted in Malaysia (except in Boocock and Mohd Shariff, 1996) or in other developing countries. The case studies provide a rich source of qualitative data to assess the extent of finance and economic additionality. Our research programme demonstrates that the NPGS has achieved finance additionality comparable with achieved in guarantee schemes elsewhere, as well as a significant degree of economic additionality. Interviews with key informants yielded much important information on the net cost of the Scheme. However, the net cost was difficult to determine with any degree of precision.