Definition of Government-Sponsored Enterprise (GSE)

a quasi-governmental organization that is privately owned but was created by the government and retains certain privileges not afforded totally private entities.

Example: Both the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation are government-sponsored enterprises that were created by the federal government but transferred to private owners. Both organizations have the implicit backing of the U.S. Treasury, which allows them to raise funds at lower interest rates than other private concerns.