Mutual Guarantee Societies are initiatives put in place by socio-economic circles (Chambers of Commerce, Business Federations, and Banks in the SME sector) in the area of financial services. They generally operate midway between three main partners : SMEs, Financial Organisations and Public Authorities
Guarantee Funds were founded by States or Regions as guarantee instruments, in the range of policies in favour of SMEs. They can intervene either directly towards entrepreneurs or as reinsurance of commitments taken by Mutual Guarantee Societies. In this case, there is a leverage effect between public and private sectors.
Both pursue the same purpose of providing easier access to investment loans for small or medium-sized enterprises that lack the necessary collateral required by banks in order to build a stable long term relationship.