Spanish SGRs are mutual guarantee societies which are financial institutions and a specific scope of activity (by geographic political unit – in Spain, Autonomous Regions - or by sector).
This kind of financial society came into being in 1978 to respond to the main problem of small and medium-sized businesses: access to financing. 95% of the volume of the Spanish business structure is made up of small and medium-sized businesses, important sources of generating wealth and employment. However, their negotiating power is limited by their individual size, which results in disadvantages compared to larger-sized businesses. MGSes enable overcoming this inequality by being positioned as intermediaries between the small and medium-sized businesses and the financial credit institutions.
To facilitate access to credit for small-and-medium-sized businesses and improve their conditions for financing, in general, through providing loan guarantees to banks and other lending institutions.
"Act 1/1994, of 11 March" (Ley 1/1994, de 11 de marzo), concerning the "legal regulations of ‘Mutual Guarantee Societies’ " (Régimen Jurídico de las Sociedades de Garantía Recíproca) grants SGRs the status of being financial institutions, which means they are subject to the rules of prior authorisation, monitoring and inspection by the Banco de España applicable to any lending institution.
A public counter-guarantee run by CERSA (Compañía Española de Reafianzamiento, S.A. – the "Spanish Counter-guarantee Company"), an instrumental society of the Ministry of Industry’s General Management Policies for small-and-medium-sized businesses.
Spanish SGRs are associates of the "Spanish Confederation of ‘Mutual Guarantee Societies’ " (Confederación Española de Sociedades de Garantía Recíproca - CESGAR), which takes on the functions co-ordination, co-operation, defence and representation of the interests of its members and, at the same time, promotes all kinds of agreements with public or private, national or foreign institutions, and provides assessment and technical assistance. At present, all of the societies in the sector belong to the Confederation.
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