The Study Of Private Banks' Development And SMEs' Financing

With the improvement of China's market-oriented and changes in domestic and foreign trade environment, Small and Medium-sized Enterprises (SMEs), as engines of economy, have played a more and more important role in creating working opportunities, activing market and adjusting industrial structure. However, the developments of SMEs are being restrained by various aspects, of which financing is the first. The financial resources of SMEs and its role for national economic and social development are in the vastly disproportionate. The state-owned banks'structural withdrawing from the market causes the "vacuum" of "regional" financial services. Competitive bank mechanism can only really be formed with the introduction of new private owners. So outside forces of mechanism can be used to speed up the reforming of the banking system, improve the financing system and broaden the financing channels, provide with adequate sources of capital for the private economy's Sustainable and healthy development. So it is very meaningful to find causes of financing difficulty of SMEs and identify appropriate countermeasures according to China's national conditions, for the healthy development of SMEs and the further development of China's economy.This paper uses Marxist politics and economics as its fundamental theory guiding, combining Western market economics combining theory, theory of corporate finance and financial theory, focusing on Empirical analysis and research, paying great attention on systematic, comprehensive and theoretical. It analyzes how to satisfy the financing needs of SMEs and the development of private banks and their relations. This paper first discusses the important role of SMEs in China's economic development. Then the analysis of statistical data and examples show that SMEs are facing a serious problem of financing. On this basis, it further indicates the reason of the financing difficulty of SMEs. To solve the financing problem of SMEs, the paper analyzes the private banks'historical development, advantages and disadvantages. Then this paper quotes the data of Minsheng Bank as an example. Powerful proofs are found which show the huge comparative advantages of private banking in serving SMEs. Finally, the suggestions about the designing of China's private banking system , guarding against risk, human resources and corporate culture are proposed as the logical end of this paper.On the basis of existing research results, this paper does some explore innovations. First, in the thinking of studying, majority of the domestic Literature did the study of private banks'financing problems and development of SMEs respectively. But this paper starts with the source of SME financing difficulties, and then analyzes the overall environment and development of China's financial situation, focus on the mutual influence between SME financing and the development of private banks. Second, about the analysis methods, this paper focuses on data, examples and real progress. Through systematic analysis of data and specific case of Minsheng Bank, financing problems are being analyzed completely. Given my problems of knowledge's volume and structure, certain difficulties in data collection, so regional differences in the private banks, as well as the direction of further study, has not been thoroughly analyzed.