Research On The Relationship Lending Model

This paper will analyze the relationship lending model adopted by Xiangtan Commercial Bank Jiuhua Branch based on the theories of bank-enterprise relationship and relationship lending. At first, this paper describes the basic theory of relationship lending model, including its definition, causes, cost-benefit analysis, general characteristics and scope. Then, this paper uses the case of Xiangtan Commercial Bank Jiuhua Branch, considering more details about its external environment and business characteristics. Except these descriptions, the paper pays more attentions on the costs and benefits about this model and then compares two. Besides, we consider the specific states about the Park Economy, SMEs and commercial banks, and get the answer and direction of this model. At last, we make an conclusion about the whole paper.Under this analysis framework, we can come to these four key conclusions:(1) Relationship lending is a good method to deal with the SME's difficulties in financing, which solves the information asymmetry problems and improves the bank-enterprise relationship at the maximum. (2) Relationship lending model is helpful for the small and medium sized commercial banks to obtain the SME's credit market and increase the capabilities to control the risks and price for risks, then to win the competitive market and earn the money and realize the real transition into the service-oriented banks. (3) Perfecting the relationship lending model will be a large engineering, depending on the good financial ecology environment, SME's good business qualities, the commercial banking administration and the financial product innovations. (4) In the context of Imperfections in the credit system and underdeveloped capital markets, the formation of this model is reasonable. However, with the development of the credit institution and the capital market, it will make a directional change for the model. The model must make the best use of its information resources to update its services; on the other hand, it will be not bad to develop this model in the rural areas.Beside the above analysis, we also pay more attention to relate this model to the regional economy and the Park's building. Developing this credit model in the Industrial Park can enjoy lots of policy preferences and therefore promote the regional economy. In this paper, we distinguish the size differences in the commercial banks on businesses and make clear difference between the hard and soft information. Above this, the biggest innovation is highlighted that is to make the soft information become a resource which can lead this model to be a better one and guide the commercial bank to be a service-oriented bank and finally promote the revolution of the free financial market.