Analysis Of Chinese SMEs' Credit Financing Under Information Asymmetric

Currently, China's SMEs (small and medium-sized enterprises) have played an important role in the growth of the national economy, and manifest outstanding advantages on taxing, employment and exporting, the government and all the society departmentes pay much attention on them.The key problem about SMEs'development is that fund lacking. The SMEs'financing approach is limited, and much of the fund comes from bank. Because of the information asymmetry and the credit ration, it's difficult for SMEs to get bank loan. This paper analyzes all the inside and outside factors about SMEs'financing, and points out that because of the SMEs'limitation and incompetent financing environment, it's difficult for SMEs to get bank financing by traditional way, but relationship lending is helpful. Relationship lending can prove the SMEs'financing efficiency; reduce collateral and financing cost; reduce the enterprise's loss of temporarily finance crisis. At the same time, relationship lending can relieve bank's supervision hardness, increase profit and detract the credit portfolio risk.Relationship lending asks the bank new administration, the paper finanlly analyzes the organization and inside principal-agent issue in the bank, and promotes some advices.The main contributions in the paper are drawn up as follows:â‘ A supply-demand balance model is built to prove that bank can't get market-clearing by changing interest. Bank should distribute the loan at a low interest, then the SMEs will have to meet credit ration.â‘¡Because of the serious information asymmetry, a model is built to analyze that default risk will be very high by traditional credit way. Relationship lending provides the bank to get residual claim, so bank debase SMEs'credit threshold. Relationship lending is the best way for SMEs to get bank loan becanse it also can relieve bank's supervision hardness. Relationship evaluation factor is introduced into the model for the first time, proving that relationship lending can't eliminate credit ration.A long-term model is built to analyze SMEs'debt-payment behavior, concluding indexs such as loan term, the least payment per term, and so on, providing feasible scheme to develop relationship lending. And by data demonstrating, the paper makes sure that SMEs'finance indexes can take a poor even converse attest in bank's credit judgement. Relationship lending can promote not only the acquirability of bank loan for SMEs, but also ameliorate the bank's credit asset quality.â‘¢By analyzing the bank organization and pricinpal-agent issue, this paper points out that the small bank should be encouraged and the subbranches should be credit accredited rationally. To the client managers, spot encouragement should be desalted, and SME's output should affect the client manager's reward.