Financing Bottlenecks And Breakthrough Of Credit Troubles In The Growth Of SMEs In China

Both in developed and developing countries, SMEs (small and medium-sized enterprises) are making great contributions to the country's national economic development. Nowadays, the SMEs in China are the main force for our country to independently innovate, boom national economics and expand employment. The national 66% of the patent inventions and 82 % of the new product development are from SMEs in China. However, the social status of SMEs in China is not congruent with their great contributions. They have been discriminated in financing process, and the difficulties in financing are always the crucial problems that restrict enterprises' development and expansion.Compared with large enterprises, SMEs in China are generally weak in capability, small in scale, irregular in management and low in credit rating. All these significantly restrict SMEs financing ability in China. Besides, other reasons also result in the financing bottleneck of SMEs in China. Generally SMEs in China lack of government's strong support; present longitudinal financing system are mainly serving for large state-owned enterprises; commercial banks and other financial institutions are rigorous to lend to SMEs and have strict examinations to evaluate SMEs loan qualification. Moreover, the credit guarantee system is far beyond perfection in China, and the financial crisis also influences a lot. The SMEs are now facing a more struggle situation than ever. Therefore, this research of the SMEs financing difficulties has its important realistic significance.This thesis firstly introduces the research background, and summarizes the classic literatures both in China and abroad, then defines SMEs, and reviews the relevant corporation financing theories. Then, we elaborated the present SMEs financing situations in China, and analysed the reasons both from internal environment view and from external environment view, and finally figured out the source of all the problems are the credit troubles facing by SMEs in China. Therefore, this thesis gave suggestions on how to breakthrough credit troubles for SMEs, basing on the market to microcosmic credit construction as the breakthrough point. It is first proposed schemes by which SMEs can breakthrough credit troubles. On this basis, the thesis put forward the comprehensive solution to SMEs financing bottlenecks.