Marketing: The Crucial Success Factor for Pakistan’s Credit Guarantee Scheme

This paper, confines the focus to a discussion of how inadequate marketing diluted the scheme’s impact. Specifically, several commercial banks could not tailor elements of their marketing mix—including people, products, processes, and promotions—to take full advantage of the scheme. That said, periodic revisions of the scheme helped to address some of its shortcomings, while the expectation is that other indicators will improve due to the recent changes in the scheme’s parameters. The key finding is that policy makers can maximize the impact of a credit guarantee scheme by paying attention to the marketing mix, which sets up participating financial institutions for success (or failure) during the implementation phase. In addition, the scheme’s structure should be a long-term intervention and its intended duration should be clear at the outset so that the participating financial institutions are motivated to design and roll out specialized products that tap the full potential of credit guarantees. Furthermore, the scheme’s originators should be prepared to develop the entire ecosystem, which may include some initial hand holding of SMEs.