International Perspective on SMEs Regulatory Framework with Iberoamerican Network of Guarantees

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The regulatory framework of SMEs, particularly within the Iberoamerican Network of Guarantees (REGAR), showcases the establishment and operations of guarantee schemes in various countries such as Spain, Mexico, Portugal, and others. The warranty industry has witnessed global expansion with diverse modalities and structures. Guarantee systems utilize resources from public or international cooperation, managed through legal and regulatory frameworks. The coverage and credit management strategies vary, emphasizing the importance of guarantee schemes in fostering financial support for small and medium enterprises.

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THE REGULATORY FRAMEWORK OF SMEs BANHPROVI FROM AN INTERNATIONAL PERSPECTIVE ASOCIACI N RED IBEROAMERICANA DE GARANT AS REGAR

THE IBEROAMERICAN NETWORK OF GUARANTEES - REGAR OPERATES AS AN IBEROAMERICAN NETWORK SINCE 1998, ESTABLISHED AS AN ASSOCIATION IN 2017 ESPA A (1) M XICO (4) PORTUGAL(1) BANDESAL HONDURAS (1) 11 Countries 18 Institutions SALVADOR (2) COSTA RICA (1) COLOMBIA (2) BRASIL (1) PER (1) ARGENTINA (4) SOCIOS ESTRAT GICOS

THE WARRANTY INDUSTRY HAS EXPANDED WORLDWIDE, PRESENTING DIFFERENT MODALITIES AND STRUCTURES. Guarantee societies, legal companies Guarantee societies, mutual legal companies Warranty Program No warranty scheme

THERE ARE VARIOUS TYPOLOGIES AND SCHEMES IN GUARANTEE SYSTEMS GUARANTEE FUND GUARANTEE PROGRAM GUARANTEE SOCIETY Allocation of resources for specific purposes Commercial companies with contributions of resources Funds managed through a state agency or bank WHAT ARE THEY? RESOURCE SOURCE Public or international cooperation. They do not have specific legislation, mostly created by law. Private and public Public or international cooperation They do not have specific legislation, operate under the same regulation applicable to the administrator with precisions in the case of reserves, capital and Financial Intermediaries. Requiere legislaci n y regulaci n espec f ca LEGAL AND REGULATORY FRAMEWORK Generally 50% of the default. COVERAGE Between 50% and 90% Garant a solidaria ante la Entidad financiera (100%) CREDIT MANAGEMENT Operates as first floor Delegate (Second floor) Delegate (Second Floor) WEIGHTING GUARANTEED CREDIT 100% 50% 100%

GUARANTEE SCHEMES IN IBEROAMERICA SGM (1) SGR(4) SGM Fondo de Garant a (9) Programa de Garant a (9) SGR PG FG No. INSTITUCIONES DE GARANT AS Banco de Desarrollode Jamaica(DBJ)Programade mejoramiento de cr ditoparalasMIPYMES PA S No. INSTITUCIONES DE GARANT AS PA S 45 Sociedades de Garant aReciprocas FOGAR,FOGABA + 5 FGCS Banco centralde barbadosBCB (programaparamejorade acceso al cr dito parala productividad) 11 PG Jamaica(1) FG SGR 1 Argentina(47) Autoridad de la micro peque a y mediana empresa AMPIME(ProgramaFROFIPYME PROGRAMA DE FOMENTO EMPRESARIAL-froPYME) NacionalFinancieraNAFIN SociedadHipotecariaFederalSHF Fideicomisos Instituidosen Relaci n con la AgriculturaFIRA Programade Garant aparaImpulsarla Exportaci nde Bancomext 2 Barbados(1) PG 12 PG M xico(4) Fondo de Garant ade Cr ditosparael Sector Gremial(FOGAGRE) Fondo de Garant a para Cr ditos de Vivienda de Inter s Social (FOGAVISP) Fondo de Garant aparaCr ditosProductivos (FOGACP) Banco de Brasil/Fondo de Garant a de Operaciones FGO: Programa Nacional de Apoyo a la Micro y Peque aEmpresaPronampe Banco Nacionalde DesarrolloEcon micoy Social-BNDES/Fondode Garant a de Inversiones(FGI):Programade Emergenciade Acceso al Cr ditoPEAC SGCCentral FG 3 Bolivia (4) PG 13 Panam (1) PG 14 Paraguay(1) FG FOGAPYFondosde garant asdelParaguay Fondode Garant aparala peque aIndustriaFOGAPI Fondo de Respaldoa la Peque aEmpresaFONREPE Banco de desarrolloCOFIDE (FAE MYPE) Sociedad de Garant amutuaNORGARANTE Sociedad de Garant amutuaLISGARANTE Sociedad de Garant amutuaGARVAL Sociedad de Garant amutuaAGROGARANTE Fondode Contragarant aMutuo(FCGM) Sociedad Portuguesadegarant amutua SPGM SistemaNacionalde Garant asSIGA CONFIANZASA-FGR Fondo Nacionalde Garant aRec procaspara la Peque ay Mediana Empresa(FONPYME) 4 Brasil(3) FG 15 Per (3) SGR Fondo de Garant aparaPeque os EmpresariosFOGAPE fondode garant aCORFO paraproinversi n SGRs PG SGM 5 Chile(9) FG 16 Portugal(6) FondoNacionalde Garant as(FNG) 10FondosRegionalesde Garant a 6 Colombia(11) FG 19 20 Uruguay(1) PG CONAFIPS Fondonacionalde garant asde Ecuador Garant asy Servicios,S.A. de CV, SGR Fondosalvadore odegarant as-BANDESAL PG Fondode Desarrollode la Micro, Peque ay MedianaEmpresaFODEMIPYME 7 CostaRica(1) Honduras FG FG 8 Ecuador(2) 21 Venezuela (1) FG PG 9 El Salvador(2) SGR CERSA SociedadMercantilEstatal(SME)reafianzadora 18Sociedades de garant arec proca SGR 10 Espa a(19)

SCHEMES OF GUARANTEE SYSTEMS IN IBERO-AMERICA Heterogeneous legal structures Explicit legal and regulatory framework Limited funding sources particularly in the cases of SGRs and SGCs Corporate governance structure is established in legislation There are instances for goal setting and planning, as well as approval of new products and warranty programs. Structures with autonomy to technically assess the granting of guarantees To mitigate fiscal risks, policy guidelines define budget limits, mainly those for non- reimbursable resources. The use of funding and existing limits are periodically reviewed based on auditable performance parameters.

GUARANTEE SCHEMES IN IBEROAMERICA IN GENERAL, SIMILAR LEVELS OF LEVERAGE, HEDGING, AND SUPERVISION ARE HANDLED EXCEPT IN THE CASE OF FISCAL INCENTIVES AND TAX EXEMPTIONS.. Tax exemptions between 25% and 35% on gains from capital contributions to SGR's (ARGENTINA) Entre 3 y 5 veces. Greater according to expected loss FISCAL LEVERAGE /COVERAGE STIMULUS/CAPITAL CONSUMPTION 50%-75% Crisis: 80% y 90% Lower use of capital capitalizing only 1.6% of the 8% required (M XICO) Portfolio Guarantee Sectoral Funds Counter-guarantees Syndicated guarantees Electronic auctions MODALITIES It is used by SGRs and Guarantee Funds. (ARGENTINA) REASSURANCE

OUTSTANDING COLLATERAL BALANCE 2021 184,260 miles USD$ % COUNTRY( No. Entes) TOTAL - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 Espa a 124,360 67.5% Brasil 17,973 9.8% Portugal 10,886 5.9% Chile 10,724 5.8% Mexico 8,503 4.6% Colombia 7,662 4.2% Argentina 2,079 1.1% Portugal, Chile, M xico y Colombia - Public guarantee funds independent or managed by Development Banks. Peru 1,079 0.6% Uruguay 493 0.3% El Salvador 180.50 0.1% Honduras 153 0.1% Argentina Public Guarantee Funds and Mutual Guarantee Societies Ecuador 111 0.1% Costa Rica 56 0.0% Brasil y Espa a Reciprocal Guarantee Companies and Public Banking Bolivia 1 0.0% Source: REGAR with data from the statistics of the activity of the guarantees 2021

CREDIT BALANCE MOBILISED 2021 RELEVANT PARTICIPATION OF GUARANTEE FUNDS 241,236 miles US$ COUNTRY( No. Entes) % TOTAL 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Espa a (3) 159,577 66.1% Brasil (5) 19,807 8.2% Mexico (4) 17,478 7.2% Portugal (1) 14,667 6.1% Chile (5) 14,152 5.9% Colombia (3) 10,494 4.3% Argentina (3) 2,116 0.9% Portugal, Chile, M xico y Colombia - Public guarantee funds independent or managed by Development Banks. Peru (2) 1,208 0.5% Uruguay (1) 806 0.3% Honduras (1) 314 0.1% El Salvador (4) 305 0.1% Argentina Public Guarantee Funds and Mutual Guarantee Societies Ecuador (1) 165 0.1% Costa Rica (2) 146 0.1% Brasil y Espa a Reciprocal Guarantee Companies and Public Banking Bolivia (2) 1 0.0% Source: REGAR with data from the statistics of the activity of the guarantees 2021

NUMBER OF GUARANTEED MSMES (2021) COUNTRIES WITH PUBLIC GUARANTEE FUNDS STAND OUT WITH GREATER MASSIVENESS. 6,869,166 Mipymes % PA S TOTAL (No. Entes) 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Colombia (3) 2,039,431 29.7% Mexico (4) 1,598,338 23.3% Brasil (5) 1,096,979 16.0% Espa a (3) 816,188 11.9% Argentina (3) 492,287 7.2% Chile (5) 450,727 6.6% Peru (2) 167,461 2.4% Portugal, Chile, M xico y Colombia - Public guarantee funds independent or managed by Development Banks. Portugal (1) 87,747 49,338 1.3% Honduras (1) 0.7% El Salvador (4) 31,825 0.5% Uruguay (1) 28,139 0.4% Argentina Public Guarantee Funds and Mutual Guarantee Societies Costa Rica (2) 6,071 0.1% Ecuador (1) 4,414 0.1% Brasil y Espa a Reciprocal Guarantee Companies and Public Banking Bolivia (2) 221 0.0% Source: REGAR with data from the statistics of the activity of the guarantees 2021

GUARANTEE SYSTEMS IN LATIN AMERICA EVOLUTION 2000 2021 6,414 5,965 SMESs (miles) + 6 TIMES 3,334 1,288 688 2000 2000 2005 2005 2010 2010 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 88,658 CREDIT AND GUARANTEES (mill) Mobilized Credit + 11 TIMES Balance Guarantees+ 13 TIMES 66,203 66,992 49,014 30,526 18,785 7,653 4,836 2,258 2000 2000 2005 2005 2010 2010 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 Source: REGAR with data from the statistics of the activity of the guarantees 2021

EVOLUTION 1998-2021 IN LATIN AMERICA: GREATER NUMBER OF SMES SUPPORTED WHILE THE CREDIT MOBILIZED INCREASED Post- pandemic 69% COVID Credit mobilized SMEs 100,000 9 times Thousands 6,414,186 88,658 90,000 5,963,726 69% 80,000 70,000 66,992 4,112,894 60,000 219% 3,524,153 50,000 44,324 43,269 40,179 39,436 40,000 36,660 35,843 35,798 35,481 1,288,248 32,774 30,527 688,730 30,000 21,998 20,000 14,042 12,065 9,367 7,654 10,000 6,149 3,675 1,307 0 1998 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: REGAR with data from the statistics of the activity of the guarantees 2021

EVOLUTION 1998-2021 IN LATIN AMERICA: GROWTH, HIGHER LEVERAGE, MORE CREDIT MOBILIZED, COUNTERCYCLICAL ROLE Credit mobilized Balance guarantees Permanent resources (patrimony)) Post- pandemic 100,000 COVID Thousands 88,658 90,000 Significant growth in mobilized credit, without significant resource requirements. Sustaining levels of credit mobilized 80,000 70,000 66,992 60,000 50,000 44,324 43,269 40,179 39,436 40,000 36,660 35,843 35,798 35,481 32,774 30,527 30,000 21,998 20,000 16,051 14,042 12,065 9,367 8,847 8,357 8,149 8,070 7,654 10,000 7,083 6,961 6,954 6,725 6,452 6,149 5,623 5,304 4,629 3,675 2,618 1,991 1,551 1,515 1,307 1,190 592 418 0 1998 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: REGAR with data from the statistics of the activity of the guarantees 2021

EVOLUTION 1998-2021 IN LATIN AMERICA: GROWTH, HIGHER LEVERAGE, MORE CREDIT MOBILIZED, COUNTERCYCLICAL ROLE Credit mobilized Balance guarantees Permanent resources (patrimony) X Leverage Cobertura Post- pandemic 100,000 Thousands COVID 88,658 75% 90,000 Growth stabilizes Growth, maturation of different types of guarantee systems 80,000 70,000 66,203 74% 66,992 60,000 59% 54% 50,000 44,324 40,179 49,014 40,000 26,790 30,000 21,847 x 7 16,051 20,000 63% x 5 8,149 x 7 6,954 7,654 10,000 4,837 x 8 8,847 2006 x 5 1,515 2005 0 1998 2000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: REGAR with data from the statistics of the activity of the guarantees 2021

MAIN REGULATORY HURDLES 1. Insufficient legal and regulatory framework : In some countries, legislation and regulations related to guarantee institutions may be scarce or outdated, which hinders the development of guarantee funds towards more robust and capitalized systems. 2. Bureaucracy and excessive paperwork: Bureaucratic processes and complicated administrative procedures can slow down the operations of guarantee institutions. 3. Inter-agency coordination: The lack of coordination between guarantee institutions with regulators and government agencies limits the effectiveness of the measures to be implemented. 4. Capital and reserve requirements: The lack of understanding of the guarantees and their different modalities causes the application of rules that generate excesses in the reserves and capitalization.

MAIN CHALLENGES Simplify processes that do not represent potential risks Greater involvement of authorities and regulators in the understanding of guarantees in some countries of the region Generate schemes that detonate automatically in the face of crises. Replicate syndicated guarantees to other countries in the region Establish mechanisms to replicate European Investment Funds programmes in the region Fortalecer los reafianzamientos, como una medida necesaria para la distribucii n del riesgo de las carteras.