INDEPENDENT NEWS

Business Finance Guarantee Scheme Interim Evaluation

Published: Thu 22 Dec 2022 12:37 PM
An independent, interim evaluation of the Government’s Business Finance Guarantee Scheme (BFGS) has been undertaken by Business and Economic Research Limited (BERL).
The BFGS, which closed to new lending on 30 June 2021, supported the provision of loans to viable businesses that needed credit for cashflow, capital assets and projects related to, responding to, or recovering from the impacts of COVID-19. It encouraged participating lenders to lend where otherwise they may not have, through the Government taking up to 80 per cent of the loss should the loan default.
The Treasury-commissioned interim evaluation reviewed the effectiveness and ongoing operations of the scheme.
"There is a lot of good feedback in the report that will be useful to inform any policy decisions that may be required to support potential widespread business disruption in the future," says Peter Rowe, Acting Head of New Zealand Export Credit.
"That feedback includes that the Government backing provided confidence to the market in a time of global uncertainty, and the reduced cost of funding to banks and restructuring of debt for businesses allowed many businesses to survive through the pandemic.
"We also learned that we need to better engage sooner with Non-Deposit Taking Lenders (non-bank lenders), and that the legalistic wording of the scheme in our communication had been off-putting to some."
The report notes that the BFGS ‘instantly played a critical role in financing businesses operating in industries hit hard by COVID-19’ including retail trade, accommodation and food services, and construction industries.
"BERL noted that for many firms, the prospect of taking on more debt was not attractive, but being able to refinance some of their existing debt allowed them to survive through the pandemic.
"We plan to share this report with counterparts in other countries who implemented similar programs to support their domestic economies."
The Business Finance Guarantee Scheme Interim Evaluation is available here: Proactive Release of the Business Finance Guarantee Scheme (BFGS) Interim Evaluation.

Next in New Zealand politics

New Fishing Rules Reflect Fishers’ Proactive Actions
By: Seafood New Zealand
Government To Reverse Blanket Speed Limit Reductions
By: New Zealand Government
Labour Supports Inquiry Into Rural Banking
By: New Zealand Labour Party
Govt Consulting On Cutting Red Tape For Exporters
By: New Zealand Government
Shane Jones Fires Damp Squib In Response To Giant Backlash Against Luxon’s War On Nature
By: Greenpeace
Government To Add Oil And Gas To Climate Fire
By: Green Party
View as: DESKTOP | MOBILE © Scoop Media