Study On SMEs' Financing Puzzledom And Relational Financing

With the globlazation of the economy, the Medium and Small Enterprises(the MSEs) play more and more important role in the development of the economy and the social coordinated growth. But the operating environment of it is not quite good, especially the problem of the MSEs' finance, which has been the main obstacle that restricts the survival and the development of the MSEs. How to solve the problem of SMEs' financing, it has become a hot topic in academic research.At present, the main means of SMEs'financing is through banks for loans in China. However, Four major state banks is still occupy a monopoly position in China's banking system currently. SMEs cannot get full supports from the four major state banks.Why big banks are not willing to give full financial support to SMEs? What is the fundamental financing difficulty for SMEs? The author believe that the key part for SMEs'financing difficulties is not in small scale and operating risks, but in asymmetric information between lenders and borrowers. First, from the viewpoints of SMEs, the SMEs operating information is introverted or is not fully disclosed. Secondly, from the viewpoints of large banks, the large banks have no incentive to understand each SMEs'internal information. I think relational financing is only way to solve this problem. How to eliminate the asymmetric information between borrowers and lenders becomes the key to solving difficulties in SMEs'financing.This paper includes four sections. The first part, the author systematically studied the theory of SMEs. First, from the viewpoints of qualitative and quantitative studied the define for SMEs in Western countries and China. Secondly, the author studied the position and role of SMEs in the national economy. The second part mainly study the financing status in present. Firstly, dividing SMEs'financing two parts: financing from inside and financing from outside.。Secondly, the author studied the reasons for SMEs'financing difficulties form the viewpoints of theories. The third part mainly studied SMEs'relational financing theory and pointed that the key of solving the difficulties of SMEs'financing is relational financing. The fourth part mainly studied the channels of SMEs'relational financing. In this paper, there are still some deficiencies. Because no reference case, it is not possible to certificate for the conclusion of this study, Analysis of issues is a little sufficient comprehensively and meticulously.