Credit guarantee funds are a tried-and-tested instrument to improve access to finance. This paper aims to share experience from the CrossRoads Guarantee Fund in Uganda. The Fund was established in 2012 as one of the interventions under the CrossRoads Programme funded by the Department for International Development (DFID) and the European Union (EU) to build capacity and competitiveness in Uganda's roads sector. The objective of the Fund is to improve access to finance for contractors/consultants. The Fund has created significant benefits and impacts that include enabling contractors to secure bid securities and performance bonds valued at Ugandan Shillings 11.7 bn (US$4.7 m); improving relationships between financial institutions and contractors; and significant crowding-in by financial institutions. Important lessons to guide scaling up or replication of similar initiatives are emerging. First, a guarantee fund creates significant behaviour change on both the supply and demand sides of the financial services market. Second, high leverage and impact can be achieved from a modest investment. Third, fund access conditions should be stringent enough to minimize moral hazard. Fourth, fund utilization, leverage, and outreach depend on work flow. Finally, protracted procurement processes raise costs and undermine the effectiveness of a guarantee fund.

African Development Bank (2013) Promoting the Domestic Road Construction Industry in Africa, Tunis. Research Report prepared for ADB by IMC Worldwide.

Beck, T., Klapper, L.F. and Mendoza, J.C. (2008) The Typology of Partial Credit Guarantee Funds Around the World, Policy Research Working Paper No. 4771, Washington, DC: World Bank.

DFID (2005) Do Credit Guarantees Lead to Improved Financial Services? Recent Evidence from Chile, Egypt, India and Poland, London: DFID Financial Sector Team, Policy Division.

Gudger, M. (1998) Credit Guarantees: An Assessment of the State of Knowledge and New Avenues for Research, Agricultural Services Bulletin No. 129 [pdf], Rome: FAO <ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf≯ [accessed 4 May 2014]. ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf

Howarth, S. (2013) ‘Road maintenance and asset protection’, paper presented to the Roads Industry Council, Kampala, 17 April 2013.

Levitsky, J. (1997) ‘Credit guarantee schemes for SMEs: an international review’, Small Enterprise Development 8(2): 4-17.

Ministry of Works and Transport (MoWT) (2010) Policy for the Development and Strengthening of the National Construction Industry, Kampala: Ministry of Works and Transport.

MoWT (2012) Ministerial Budget Statement, Kampala: Ministry of Works and Transport.

Reichmuth, M., Flaming, M. and Dominice, R. (2006) Lessons Learnt from Guarantee Funds: The Example of the International Guarantee Fund (IGF) [pdf], Berne, SDC <www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf≯ [accessed 4 May 2014]. www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf

African Development Bank (2013) Promoting the Domestic Road Construction Industry in Africa, Tunis. Research Report prepared for ADB by IMC Worldwide.

Beck, T., Klapper, L.F. and Mendoza, J.C. (2008) The Typology of Partial Credit Guarantee Funds Around the World, Policy Research Working Paper No. 4771, Washington, DC: World Bank.

DFID (2005) Do Credit Guarantees Lead to Improved Financial Services? Recent Evidence from Chile, Egypt, India and Poland, London: DFID Financial Sector Team, Policy Division.

Gudger, M. (1998) Credit Guarantees: An Assessment of the State of Knowledge and New Avenues for Research, Agricultural Services Bulletin No. 129 [pdf], Rome: FAO <ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf≯ [accessed 4 May 2014]. ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf

Howarth, S. (2013) ‘Road maintenance and asset protection’, paper presented to the Roads Industry Council, Kampala, 17 April 2013.

Levitsky, J. (1997) ‘Credit guarantee schemes for SMEs: an international review’, Small Enterprise Development 8(2): 4-17.

Ministry of Works and Transport (MoWT) (2010) Policy for the Development and Strengthening of the National Construction Industry, Kampala: Ministry of Works and Transport.

MoWT (2012) Ministerial Budget Statement, Kampala: Ministry of Works and Transport.

Reichmuth, M., Flaming, M. and Dominice, R. (2006) Lessons Learnt from Guarantee Funds: The Example of the International Guarantee Fund (IGF) [pdf], Berne, SDC <www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf≯ [accessed 4 May 2014]. www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf

African Development Bank (2013) Promoting the Domestic Road Construction Industry in Africa, Tunis. Research Report prepared for ADB by IMC Worldwide.

Beck, T., Klapper, L.F. and Mendoza, J.C. (2008) The Typology of Partial Credit Guarantee Funds Around the World, Policy Research Working Paper No. 4771, Washington, DC: World Bank.

DFID (2005) Do Credit Guarantees Lead to Improved Financial Services? Recent Evidence from Chile, Egypt, India and Poland, London: DFID Financial Sector Team, Policy Division.

Gudger, M. (1998) Credit Guarantees: An Assessment of the State of Knowledge and New Avenues for Research, Agricultural Services Bulletin No. 129 [pdf], Rome: FAO <ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf≯ [accessed 4 May 2014]. ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf

Howarth, S. (2013) ‘Road maintenance and asset protection’, paper presented to the Roads Industry Council, Kampala, 17 April 2013.

Levitsky, J. (1997) ‘Credit guarantee schemes for SMEs: an international review’, Small Enterprise Development 8(2): 4-17.

Ministry of Works and Transport (MoWT) (2010) Policy for the Development and Strengthening of the National Construction Industry, Kampala: Ministry of Works and Transport.

MoWT (2012) Ministerial Budget Statement, Kampala: Ministry of Works and Transport.

Reichmuth, M., Flaming, M. and Dominice, R. (2006) Lessons Learnt from Guarantee Funds: The Example of the International Guarantee Fund (IGF) [pdf], Berne, SDC <www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf≯ [accessed 4 May 2014]. www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf

African Development Bank (2013) Promoting the Domestic Road Construction Industry in Africa, Tunis. Research Report prepared for ADB by IMC Worldwide.

Beck, T., Klapper, L.F. and Mendoza, J.C. (2008) The Typology of Partial Credit Guarantee Funds Around the World, Policy Research Working Paper No. 4771, Washington, DC: World Bank.

DFID (2005) Do Credit Guarantees Lead to Improved Financial Services? Recent Evidence from Chile, Egypt, India and Poland, London: DFID Financial Sector Team, Policy Division.

Gudger, M. (1998) Credit Guarantees: An Assessment of the State of Knowledge and New Avenues for Research, Agricultural Services Bulletin No. 129 [pdf], Rome: FAO <ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf≯ [accessed 4 May 2014]. ftp://ftp.fao.org/docrep/fao/012/ak921e/ak921e00.pdf

Howarth, S. (2013) ‘Road maintenance and asset protection’, paper presented to the Roads Industry Council, Kampala, 17 April 2013.

Levitsky, J. (1997) ‘Credit guarantee schemes for SMEs: an international review’, Small Enterprise Development 8(2): 4-17.

Ministry of Works and Transport (MoWT) (2010) Policy for the Development and Strengthening of the National Construction Industry, Kampala: Ministry of Works and Transport.

MoWT (2012) Ministerial Budget Statement, Kampala: Ministry of Works and Transport.

Reichmuth, M., Flaming, M. and Dominice, R. (2006) Lessons Learnt from Guarantee Funds: The Example of the International Guarantee Fund (IGF) [pdf], Berne, SDC <www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf≯ [accessed 4 May 2014]. www.microfinancegateway.org/gm/document-1.1.9215/Lessons%20learnt.pdf