The Credit And Vantage Of SMB

The small-medium enterprises(SMEs) have the important role in the development of national economy, employment opportunity and technology innovation. However, the community is confronted with financing difficulty. As the principal part of finance, small-medium banks are also the main financial servicing body for small-medium enterprise. But four large state-owed banks and China Bank of Communication monopolize financial market and are unwilling to provide financing service for SMEs. The amount of SMBs (small-medium bank) including city commercial banks is few, and small-medium bank is unwilling to open SME credit market for their own problems, the SME credit market plunges into an ineffective equilibrium. So, how to improve credit allocative efficiency, and to open SME's financing channel and meanwhile gather head core competence in order to break this situation? The small-medium banks have servicing advantage for SME to large state banks, which is tried to be tested via academic and empirical method in this paper.Under the assumption that SMB have information advantage to large bank, the core innovation in this paper is that SMB will provide loan to high and low-risk enterprise and abandon guaranty collateral if the credit cost of SMB is lower than that of large bank by using the game theory. And if the credit cost of SMB is equal to that of large bank, then high risk enterprise will gain credit from both SMB and large bank, while low-risk enterprise has to apply credit from SMB and the large bank's profit from the loan to high risk enterprise is zero. The results imply that SMBs have practical advantage to large bank in the credit market of SME. Furthermore, the credit cost of bank is divided into information and transaction cost in order to analyze the advantage of SMB. The advantage of SMB is found via cost function and model.The advantage of SMB is also found by empirical analysis. The "relationship loan" is fund empirically in China reference to forgone theoretical and empirical method. SMBs have capacity to distinguish from credit risk, the capacity implies that SMBs have advantage to large state bank in getting asymmetry information. Banks face greater credit risk when they provide loan to SME, because SME have few collateral and half-baked accountant data. The low LGD of private enterprise fund in the analysis implies that SMBs have considerable advantage by credit to SME.Another innovation is that SMB not only can identify "soft information" via "relationship loan", but also have financial cost advantage to large state bank. The statistical data of 16 banks are used and SMB's advantage of financial cost is fund. We use cost efficiency and financing cost method to analyze credit cost of Chinese bank. It is fund that SMBs have lower credit cost than state bank when per credit cost is calculated via financial data. SMBs also have cost efficiency advantage to state bank via DEA and SFA methods. Many potential factors are considered, so the advantage is durative. In the empirical analysis of cost effects, this paper shows that asset size, ratio of deposit and savings, the property right structure, assets quality and fixed assets-total assets percentage are the important factors of cost effects in SMBs. The function and policy of developing SMB is given in the last chapter.