The Governance Of Chinese Commercial Banks And SMES' Loans

The development of SMEs plays an important role in a country's economy, but the financing difficulty is troubling most SMEs. Because of our country's institutions and some other reasons, SMEs'financing mainly depends on commercial banks'loans, but this channel is becoming narrower during the reform of our country's commercial banks. Our country's commercial banks now pay more attention to large companies, and show unwillingness to the SMEs'loans, leading to a phenomenon of partial credit inflation. Different from the governance of commercial banks under a mature market in western developed countries, our country's commercial banks are mainly governed by the government, with a special principal-agent relationship, and the government's policies and institutions have a great effect on banks'credits. Based on the analysis of commercial banks'governance characters in our country, we studied the risk attitude of banks'managers and its influence to SMEs'loans. Meanwhile, we also studied the effect of unified authority policy to commercial banks'credit behaviors under our country's banking information structure from the information economics view, in order to explain the problem of partial credit inflation and SMEs'financing difficulty. Concerning the above mentioned problems, we gave some suggestions from commercial bank's governance view of our country, hoping to solve the problem of banks'unwillingness to SMEs'loans and enhance the development of our country's SMEs.