Institutional design and the financial resilience of credit guarantee schemes in SME finance

Credit guarantee schemes are widely used policy instruments to expand SME access to finance, yet limited evidence exists on how their institutional design shapes long-term viability under credit stress. This study examines two distinct performance dimensions (operational sustainability and loss-based financial resilience) across 17 Latin American schemes using fuzzy-set Qualitative Comparative Analysis (fsQCA) and Necessary Condition Analysis (NCA). The findings show that performance stems from coherent configurations of governance, growth strategies, and risk-sharing mechanisms, rather than isolated best practices. Operational sustainability is achieved through two alternative pathways: a risk-buffered expansion model, where governance and loss-sharing mechanisms support scaling, and a governance-constrained model, where limited growth and structured risk allocation maintain stability. In contrast, loss-based resilience emerges from a single, more restrictive configuration centered on disciplined growth, independent governance, and explicit loss-sharing design. The analysis also reveals strong causal asymmetry: institutional fragility arises from misaligned configurations, including cases where commonly recommended features are present but not coherently combined.