There are  BIS Review 24/2003  3  also some relevance in the provision of refinancing and credit guarantee schemes, as earlier outlined, particularly for the agricultural and industrial sectors. The risk is that such schemes could discourage the growth and efficiency of financial intermediation, particularly the mobilization of domestic savings.
In the event the extend loans went sour, 20 percent of the resulted losses should be borne by the issuing bank and the other 80 percent be absorbed by the guarantee funds, among which, provincial fiscal departments shall assume 10 percent of the losses while the other 70 percent is to be assumed by low level fiscal departments.