Relationship Lending And SME's Financing

The difficulty of SME financing has become one of the main factors to constrain its development. Thus, SME's financing has a great dependence on bank loans. Large number of foreign practice has proved that, as a way of lending, relationship lending can reduce the problem of asymmetric information, reduce transaction costs, and thus making a good contribution to the relationship between banks and SMEs, which can alleviate the financing difficulties of SMEs effectively.Chapter One: Introduction. From the aspects of SME's industrial status, current situation of SME financing,and macroeconomic background to analyze the practical and theoretical significance of SME financing,which also describes the value of this ethsis.Chapter Two: Literature Review. In this chapter, the author reviewed the related literature mainly from four parts, they are the definition of relationship financing, the relationship between soft information and relationship lending, the relationship between SME financing and relationship lending, as well as the relationship between the bank's scale and SME's relationship lending. Having fully described the results of others'research, the author also proposed the ethsis's research results. Based on"Small Banks Superiority"theory, the ethsis through taking advantage of the related datum to verify that small banks have superiorities due to"soft information"production. At last, the ethsis further noted the importance of small banks for SMEs'financing.Chapter Three:The analysis on advantages of relationship lending for the financing of SMEs. Firstly, from SME's dependence on bank loans, the comparison between trade loans and relationship loans, and the revenue and cost analysis of relationship lending three aspects, the paper illustrated the advantages of relationship lending. Secondly, from bank's organizational structure, information costs and agency costs, this ethsis analyzed usage value of relationship lending between small banks and large banks. Ultimately, the author proved from theoretical point of view that small banks had comparative advantages in the"soft information"production. And by virtue of"soft information", small banks do the relationship lending business can ease the problem of SMEs'financing more effectively.The Fourth Chapter: The empirical analysis of relationship lending. In this part, the author has further demonstrated the important role of"soft information"to SME financing. And stressed the advantages of relationship lending on solving the financing difficulties of SMEs.Chapter Five: The discussion on china's relationship lending. From the aspects of bank's institutions innovation and system innovation, SMEs'development, and the government supports in specific arrangements to make some policy recommendations to china's SME financing.