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Research On SMEs’ Financial Service Of Commercial Banks

Posted on:2013-05-29Degree:DoctorType:Dissertation
Country:ChinaCandidate:J T WuFull Text:PDF
GTID:1229330395973040Subject:Public Finance
Abstract/Summary:PDF Full Text Request
Due to the2008financial crisis dampening the external demand, the SMEs in the Yangtze River Delta and Pearl River Delta continue to fall into "collapse" crisis. A large number of SMEs fall into tight funding chain and operating difficulties because of the rising operating cost, the increasing inventory and failure of investment. From the statistical dates, SMEs’profit rate is less than3%, while they provide more than80%employment for the urban and rural and nearly60%contribution to GDP. SMEs’ development has an important influence on national stability.Based on this situation, our country has attached great importance to the development of SMEs and formulated corresponding policies. For commercial banks, the excellent enterprises continue to reduce loan demand under the condition of widening direct financing channels;with the accelerated process of interest rate liberalization, commercial bank’s net interest margin continue to be narrowed, which weakening commercial banks’dividend policy. Under the background of financial disintermediation and interest rate liberalization, it is a correct and inevitable choice for commercial banks to develop SME market,The research object of this paper is SMEs’financial service of commercial banks. This article doesn’t only discuss SMEs’credit and risk precaution, and also discusses the specific strategies from the degree of commercial banks’specialized operation, SMEs’settlement and comprehensive services, the organization structure, internal processes and system reconstruction. Different from the traditional way about financing difficulty of SMEs, this paper launches research on why and how to develop SME market. This paper begins study from three aspects:(1) commercial banks’strategic positioning and market selection under the professional requirement;(2) how to design financial products and services;(3) how to match the organization, process and system.Different customers have different demands, so it is the only choice for commercial banks to provide different and professional products and services. Under the condition of interest rate liberalization, financial disintermediation, capital restriction, the financial products are similar and easily replaced, so commercial banks must rely on their own resources to formulate clear and right strategies to maximize the development of new resources and capabilities. The broad space of SME market gives commercial banks a new direction for strategic transformation. Developing SME’s financial services helps commercial banks to enhance competitive advantage, improve capital efficiency and profitability, accelerate organization layout, and strengthen customer group construction.Considering of adverse selection, it is easy to lose good customers if commercial banks demand higher price and threshold. The contradiction between low financing scale and high development cost requires commercial banks break through traditional evaluation mode and improve efficiency. Only relying on credit factory pattern to achieve quantity and scale, combining the distributed foreground network service and the highly integrated supporting platform, it is possible to realize the transformation from dispersed to concentration, from nonstandard to standard, from multiple mode to Standardization. With SMEs’ financing, settlement and comprehensive services, it is possible to meet customers’ functional needs, emotional needs and value needs, and to achieve customer satisfaction and loyalty.With meeting customer demand as the core principles, commercial banks should follow process bank mode to strengthen organization reconstruction and process optimization to form operation mode with perfect marketing service function, strict risk control and great support. This paper proposes an organization idea for SMEs’ financial services. Establish SME department in the head office mainly engaging in product design, credit policy formulation, credit approval, post-loan monitoring. Establish SME institution in the branch engaging in product promotion and risk control. Build SME marketing-team at the sub-branch engaging in customer development. According to the characteristics of SMEs’financial services, commercial banks should reset different management modes, including internal incentive system, credit evaluation mode; guarantee system, non-performing loan rate tolerance etc. The organization, process and system guarantee is necessary for SMEs’financial services.This paper mainly uses literature analysis, quantitative analysis and empirical analysis. The study uses the knowledge, methods, skills and results from management science, economics, statistics, system theory, marketing, applied mathematics and so on.The main conclusions:(1) it is necessary and feasible to develop SMEs’financial services;(2) the SME finance has its own remarkable characteristics in services, products, and pricing;(3) the SMEs’financial services lie in organization optimization and system design.The major innovations in this article are as follows:(1) Systematically study the SMEs’ financial services of commercial bank. The study puts away the traditional perspective of financing difficulty of SME and launches research on why and how to develop the market. This paper deeply analyses the existence and development characteristics of SMEs, and discusses the market space, products and services, organization structure and business process. The paper then gives some advices and thoughts, such as seasonal financing products, corporate account overdraft services, SMEs’cooperative organization mode, SMEs’ owners club, the right and duty design between the head office and the branch, financing risk recognition and prevention, internal management system design, which providing theoretical and practical reference for commercial banks to develop SME market(2) Build a financing pricing model. Based on cost-plus loan pricing, customer profitability analysis loan pricing, price leading loan pricing, this paper proposes a pricing model of SMEs’finance and makes mathematical derivation. The conclusions are:①the lower limit of lending rate is the lowest rate of return acceptable to the bank, and the upper limit is the operation expected rate of the borrowing business;②the lending rate is a monotonically increasing function of the risk cost. The lending rates must cover the risk cost.This paper also analyses the imfluence of economic cycle, regional factors and industry factors and discusses how to reduce capital cost, operating cost and risk cost, and uses the law of large numbers to predict and control individual risk.(3) Construct a hierarchy model of SMEs’ financial needs. This paper uses consumer utility theory to discuss the influence factors about financing, settlement and financial management and other functional demand influence factors. From mathematical derivation, we draw conclusions:①The financial products or service selection for SMEs mainly depends on the cost, transaction time and risk apprehension, and the three factors are negatively related to SMEs’utility.②under the constant utility, the change of cost, transaction time and risk apprehension needs another factor to change in the opposite direction. For example,SMEs are willing to pay higher cost to shorten the transaction time, and vice versa. Based on the industry competition, commercial banks should pay attention to SMEs’differential utility from different elements while they provide financing, settlement and financial management. The paper also discusses family asset management services, cash management services and development plans to meet SMEs’emotional and value demand.
Keywords/Search Tags:Commercial banks, small and micro enterprises, financial services, marketselection, internal reconstruction
PDF Full Text Request
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