Research On Credit Guarantee Financing Model For SMEs Under The Credit Rationing

Since 1990s,SMEs in china have got great development ,which have become an important component of national economy . SMEs have played an important role in the promotion of economic development ,technological innovation and providing jobs, However, It's a common characteristic for SMEs around the world to be "in high position but with low potency". The difficulties and constraints faced by SMEs have attaches great concerns from the government. Financing predicament has become one of the main bottlenecks in the development of SMEs in China . Due to intense competition and the low profitability in the SMEs,the endogenous financing is far from adequate to meet the demand for funds .Because the current financial system is dominated by indirect financing system and the development of the capital market is obviously backward compared with foreign developed countries , many SMEs can not leap the threshold Of direct external financing . China's SMES mainly rely on bank loans and other indirect financing tools. Due to the small size of SMEs ,intense competition , and weak financial strength , the information asymmetry between banks with SMEs is more serious than large enterprises.It has been a basic way to support SMEs development to build the Credit Guarantee system for SMEs so as to shorten the gap of loans for such enterprises. The Credit Guarantee system in China already have a certain scale after more than 10 years development, which played a positive role in alleviate the financing difficulties of SMEs. But there is structural defect in Credit Guarantee system ,which leads to such problems as : Small scale of fund , fewer fund sources , serious governments intervention , too little help to SMEs , imperfect compensation mechanism which limit the role of Credit Guarantee system to play.To solve these problems, I have studied the following problems :1.Why the bank credit financing of SMEs is difficult?2.What is role of Credit Guarantee in alleviating Credit Rationing? 3. What problems exist in the structure of Credit Guarantee system ? Are there differences in promoting financing efficiency of each Credit Guarantee model ?what is the main functions of the three types of Credit Guarantee financing model?4. This paper analyses the difficulties of Mutual Credit Guarantee financing on the basis of viewpoint that Mutual Credit Guarantee financing should be actively be developed ,and give a basic framework of Mutual Credit Guarantee financing model relying on the cluster of SMEs.The paper is divided into five parts :Part I : Introduction ,including background ,literature review and framework of the paper.Part II : Analysing the situation and characteristics of SMEs financing .The main problems of financing of SMEs are such as following :1. Endogenous financing can not meet financing need of SMEs.2. SMEs can not use such financing tools as stock ,note,risk investment and leasing.3. Indirect financing mainly relys on the bank credit loan which is also the characteristics of SMEs financing.Part III : The paper analyses how the SMEs to be the target of Credit Rationing based on the theory of Credit Rationing . Asymmetric information is the underlying causes of Credit Rationing . To solve the credit financing , studies should be focused on how can we alleviate Credit Rationing .Part IV : This part is a key part of the thesis . First , the paper analyses the mechanism of alleviateing Credit Rationing ,that is Credit Guarantee can alleviate asymmetric information effectively between banks and SMEs .To develop Credit Guarantee financing is an effective way to alleviate bank Credit Rationing . Then the paper analyses the difference in promoting the efficiency of SMEs financing between three types of Credit Guarantee financing model, the conclusion is Mutual Credit Guarantee financing has an advantage over the other two Credit Guarantee financing in the cost of obtaining SMEs information ,Credit guarantee fees and loan interest rates of SMEs from bank .According to the security dimension and geographical aggregation dimensions,the paper conducts a re-classification of SMEs, and by this classification , the paper sets the main functions of the three types of Credit Guarantee financing model ,and suggests that Mutual Credit Guarantee financing model be actively developed .Part V : This part is also a key part of the paper.In view of the current problems ,this paper presents a basic framework of Mutual Credit Guarantee financing model relying on the cluster of SMEs on the base of analysis benefits of the cluster of SMEs to Mutual Credit Guarantee financing model, including the following aspects:1. It can solve the problem of"Adverse Selection"and"Moral Hazard"effectively between Mutual Guarantee agencies and SMEs ,that will reduce the compensatory risk of Mutual Guarantee agencies.2. Large enterprises in clusters can be one sources of Mutual Guarantee fund because of strong business relevance between large enterprises and SMEs in cluster .3. Sufficient private capital in clusters is an important source of Mutual Guarantee fund.4. As developing cluster of SMEs has been the industrial development strategy of governments,the governments will provide more support such as policies and fund.5.This model reduces the credit risk of banks also ,so cooperative wishes between banks and Mutual Guarantee agencies is stronger.Then the paper designs the source of fund, organizational structure , operation several other aspects of this model and inquiry into the guard and control of default risk of Mutual Guarantee agencies for befor the event,matter in,after the event three stages.The little contribution of this paper is :1. The paper analyses the difference in promoting the efficiency of SMEs financing between three types of Credit Guarantee financing model , the conclusion is Mutual Credit Guarantee financing model is more effectively. According to the security dimension and geographical aggregation dimensions,the paper conducts a re-classification of SMEs, and by this classification , the paper sets the main functions of the three types of Credit Guarantee financing model ,and suggests that Mutual Credit guarantee financing model should be actively developed .2. Analyses the advantages of cluster of SMEs to Mutual Credit Guarantee financing,attempts to design a Mutual Guarantee financing model relying on the cluster of SMEs including source of fund ,structure and operation of this mode . The shortage of this paper is that it does not have a further and meticulous research on this model, this is the direction of the research .