Small credit, real impact

This paper evaluates the Small Credit Fund (Fondo Piccolo Credito), a regional financial instrument introduced by the Lazio Region (Italy) to address credit market gaps faced by micro and small enterprises. Using administrative data for 2017–2023 and a difference in differences approach, the evaluation finds strong financial additionality: subsidised loans increased long term debt without crowding out other financing. The programme improved firm survival and supported higher investment, particularly among smaller and more financially constrained firms. Short term declines in profitability and credit ratings highlight temporary trade offs during the investment and repayment phase. The paper concludes with recommendations to refine programme design, targeting and monitoring, with lessons for similar instruments across OECD countries.