Access to finance and the role of credit guarantee schemes in supporting a European Union candidate country: A regulatory context

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Abstract

Small and medium-sized enterprises (SMEs) are a cornerstone of the Albanian economy, contributing substantially to employment and output. This paper explores the main challenges SMEs face in accessing finance and evaluates the effectiveness of public and European Union (EU)-supported financial instruments, with a particular focus on credit guarantee schemes (CGS) (Bennett et al., 2005). Despite their economic significance, SMEs continue to face financing constraints due to high interest rates, stringent collateral requirements, limited start-up lending, and low trust in financial institutions. The analysis combines descriptive and comparative methods using both primary and secondary data. Primary data were collected through a survey of 300 SMEs — 50 from each of six key sectors (trade, production, agriculture, services, handicrafts, and others) — across six regions with high SME concentrations. Results reveal that 92 percent of SMEs are unaware or poorly informed about CGS, and only 1 percent have received support. Statistical testing shows that company age significantly affects financing choices (χ² significance = 0.025 < 0.05), while company size does not (χ² significance = 0.378 > 0.05), although smaller firms exhibit greater financing needs. The paper concludes with policy recommendations to enhance SME access to finance through improved awareness and more inclusive support mechanisms of CGS.

Keywords: SMEs, Access to Finance, Credit Guarantee Schemes, Financial Constraints

Authors’ individual contribution: Conceptualization — E.Sh.; Methodology — E.Sp. and V.C.; Investigation — S.K.; Resources — E.Sh.; Writing — E.Sh. and E.Sp.; Supervision — A.R.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C83, G21, H81, L26, O16

Received: 21.07.2025
Revised: 27.10.2025; 13.11.2025; 13.01.2025
Accepted: 05.02.2026
Published online: 09.02.2026

How to cite this paper: Shehi, E., Spahaj, E., Cinaj, V., Ribaj, A., & Kruja, S. (2026). Access to finance and the role of credit guarantee schemes in supporting a European Union candidate country: A regulatory context. Journal of Governance and Regulation, 15(1), 268–277. https://doi.org/10.22495/jgrv15i1art25