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Study On Financing System Of Small And Medium-Sized Enterprises In China

Posted on:2005-08-22Degree:MasterType:Thesis
Country:ChinaCandidate:L LiFull Text:PDF
GTID:2156360122999636Subject:Technical Economics and Management
Abstract/Summary:PDF Full Text Request
Small and medium-sized enterprises (SMEs) are playing an important role in economic and social development. But because of the high risk of SMEs, they mainly rely on owner's funds to maintain operation. The insufficient outside financing has been a restriction on their development.In the developed countries, the perfect capital market has widened the financing channels of SMEs. Angel's fund, risk investment and development of financing lease have alleviated the capital shortfalls at a certain extent. Diversification of financial institution and innovation of service not only reduce SMEs' cost on credit loan, but also reduce the risk of the financial institution. Banks have a strong ability in collecting and analyzing the credit information. The development of financing guarantee system also alleviates SMEs' information asymmetry and morals risk.Compared with developed countries, the difficulty that SMEs in our country face in financing is obviously much bigger. They not merely face the stock and debt-financing shortfall, but also face the discrimination against ownership form, scale, and deficient credit system. In this paper, after making a concrete analysis of the current situation of the financing channel of our country and the characteristics of SMEs, I regard that bank credit is main financing channel of SMEs.There are a lot of reasons causing credit gap of SMEs. The racial reason is the defect of SMEs. Secondly, SMEs cannot get suitable financing channel in the capital market. The bank system of our country is unreasonable. The medium and small financial institutions serving SMEs are not available. The state-run commercial banks occupy a monopoly position, though they have established departments serving SMEs. But because of the defect of credit loan system and procedure design, serving SMEs costs highly. In addition, financing guarantee system of SMEs of our country has not exerted fully intermediary function between banks and SMEs.Different government adopts different measures in alleviating the financing predicament of SMEs. To solve the financing predicament of SMEs in our country, I think the reform of bank system and perfection of financing guarantee should be put into first consideration. Banks of our country always establish branch banks, pursuing 'small and comprehensive', 'big and comprehensive'. This has caused the current situation that there is no living space of the medium and small financial institution. The authority should reform the bank system and encourage private capital to enter the financial market. This will help the small and medium financial institution exert information advantage in serving SMEs. But because the small and medium financial institution has not developed yet, the advantage is not obvious. I think the reform of the state-run commercial banks —changing the branch banks into regional commercial banks— is a more feasible method.There are three kinds of credit financing guarantee institutions, including policy guarantee organization, help-each-other guarantee organization and commercial guarantee organization. Help-each-other guarantee organization gives full play to the basic function of private capital. The problems arising in its running are little capital source, small scale of fund and high risk. More SMEs should be encouraged in the institutes, and we should also draw lessons from Italy—raising funds from the folk. Industry organization can be helping through controlling the credit of enterprises.Commercialization guarantee organization has a large number of highly specialized personnel, advanced management theory, innovative consciousness, and effective management modes. They have shared risk between banks & enterprises, and reduced the risk of authority. They also disperse guarantee risk by business diversity. Support policy should be put on them, such as the tax allowance, sharing the compensation losses at a certain portion.To solve problems of financing guarantee system, firstly, government should hold a...
Keywords/Search Tags:Small and medium-sized enterprises (SMEs), Financing, Trust & Guarantee System, Guarantee Institution
PDF Full Text Request
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