| Small & micro-enterprises (MSE) are the driving force of our economy, but the difficulty of SME financing has become one of the main factors to constrain its development. Relationship financing has an important role in addressing MSE financing puzzle by mitigating the information asymmetry, which is considered to be more suitable model for MSE financing than others. The relationship financing has an important part in alleviating the information opaque between the fund supply and demand, increasing the availability of MSE financing, improving financial conditions and increasing business value.We use Cost-benefit analysis, game theory, compare analysis to demonstrate the advantages of relationship financing in solving the problem of MSE finance puzzle. This article mainly discusses the relationship and mechanism of the relationship financing between capital supply and demand. At the same time, the writer studies the couple among them. The demand side of the capital is coupled with different degree of relationship financing at different growing stages. The conclusion is that relationship financing is more helpful for the early stage of MSE than others. When the enterprise and project are run out of expectation, the funding supply can use the alternative control function of the relationship financing to redistribute the control right and intervene MSE'operation. We still use case study.Building relationship financing system needs the effort of government, banks and MSE. The government is committed to developing small and medium financial institutions, standardizing the private finance, establishing the credit guarantee system, setting up information system; Commercial banks and other financial institutions need to reform the credit management and strengthen the client manager system; MSE should enhance the quality of themselves, establishing the integrity awareness, using the advantages of industrial clusters and other ways to solve the finance puzzle. |
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