A New Hypothesis On Small & Medium Business Financing: Commensal Financing Model

During the course of development of Small & Medium Business throughout the world, financing problem has been an all-pervading plight. According to the popular standpoint, as a special problem of economic development, the financing problem of Small & Medium Business apparently come of their common economic character in that their management scale is small, furthermore, however hard exert theirselvs, Small & Medium Business cannot slide over this financing plight coming from scale restriction. Therefore, the solutions to the financing plight of Small & Medium Business mainly turn to the point of financing institution or system's innovation. According to these solutions, developing small & medium financing institution and founding local small & medium commercial bank or cooperative credit financing institution can establish a symmetrical principal part relation, which can solve the credit obstacle of Small & Medium Business finally. We call these theories "the view of small & medium financing institution". The view of small & medium financing institution carries an assumption that the interest rate of credit be short of elasticity, therefore, it in fact insist on clearing up the credit rationing by finance unrestricting. According to our standpoint, the innovation and recontruction of financing institution play an important role in filling up the financing gap of Small & Medium Business. Our analysis will illuminate that the innovation of financinginstitution is a valid ,but not exclusive "solution" to the problem. By putting forward Commensal Financing Model, we present credit expanding theory of Small & Medium Business, which based on credit standing chain.