The Research Of SME’s Credit Rationing And The Simulation Of Artificial Credit Market

By analyzing the difficulties in financing for small-and medium-sized firms, thispaper reviewed and discussed the traditional credit theories. After analyzing theshortcomings of traditional credit theories, this paper set up an artificial credit marketbased on computational experimental financial methods, and studied the single-bankand multi-bank credit markets thereupon.First, the paper reviewed and discussed the status quo and development of small-and medium-sized firms, the development of commercial banks, and the related po-lices China adopted to deal with the financing problem faced by these firms and topromote their development. Further, the paper summarized the theoretical and prac-tical implications in solving the financing problem faced by small-and medium-sizedfirms.Second, by reviewing related credit and financing theories for small-and me-dium-sized firms, the paper put forward the shortcomings in current theories in deal-ing with the above-mentioned problem, i.e., the conclusions derived from the theoret-ical models depended so much on the strict hypothesis and a lot of simplifications,that they could not reflect the complexities in real world financial markets. Computa-tional experimental finance is a new theory emerged in recent years, which has pro-vided a new tool for researches in credit theories and credit markets. By employingthe simulation platform provided by computational experimental finance, the paper setup a simulation model, based on agent, in artificial credit markets, to simulate realworld credit transactions. There were individuals such as firms, banks and so on, whomade decisions by themselves, different risk-type projects, and legal and supervision-al environments where debt contracts were the financial instruments.Third, based on the simulation model in the artificial credit market, the paper setup artificial credit markets for both single-bank and multi-bank markets, and derivedthe overall features and rules in the credit markets according to simulation studies.Lastly, by introducing relationship into multi-bank artificial credit markets, thepaper testified the roles relationship loans played in small-and medium-sized firmsfinancing. Comparing the simulation results of relationship loans and non-relation-ship loans, the following conclusion was derived: relationship firms got more loansfrom banks than non-relationship firms. Therefore, improving firm-bank relationship in credit markets helped to alleviate the financing problem faced by small-and me-dium-sized firms. Though, relationship loans did not provide more profits for banks,on the contrary, they reduced bank earnings as a result of looser credit policies for re-lationship firms. However, a good firm-bank relationship contributed to economicgrowth and social welfare improvement as a whole.