Issues And Strategies On Small And Medium Enterprises Financing In China

Small and medium enterprises (SME) have made important contributions to the economy development in China. However, the financing for SMEs is far away from reflecting their positions and functions in the national economy. This article focuses on a series of issues facing SMEs, including the limited factors for SMEs themselves, limited financing channels, information asymmetry and disfunctional governmental and social financing service systems. Based on these main problems which form the constraints for SMEs financing, this article analyses the reasons to these problems. At the same time, this article also gives policy recommendations which aim to increase the quality of SMEs, restructure the credit mechanism of commercial banks, develop small and medium sized private financing institutions, enhance the development of direct financing system and improve credit guarantee for SMEs and other social financing service systems etc.