Research Of Business Models Of China Development Bank For Small And Medium Enterprises

As an important force in China's economic construction, small and medium enterprises (SME) cannot be developed without funds. To develop SME and help enterprises to grow, the open financing channels must be established in China. We must observe the laws governing economic development in this process and complete the capital market through market-oriented means. We should stick to the principle of market orientation in financing activities, which should be organized and guided by the government. New approaches to market-oriented fund-raising should be developed. However, due to the lack of a sound financial system and appropriate business model, the commercial banks and financial institutions lack the enthusiasm to finance SMEs. In recent years, China Development Bank has brought some good results in the field of innovation and exploration in business model. Commercial financial institutions shall learn useful experience from studying business model of China Development Bank and promote SME in China.At first, this article introduces China Development Bank, and then investigates the current status of financing for SME. The article tries to explain the cause of ''financing difficulties and loan difficulties'' from aspect of banks and SMEs. From the stand point of risk source and control, basically, it is the root of problem that the risk is difficult to identify, to control, and to price. Due to asymmetric information, both lenders and borrowers in the market are vulnerable to adverse selection and moral risk. The article explains the characteristics of Development finance and the business model of China Development Bank in SME financing market, and further, analyses the successful experience to identify and control risks. Through building an information management platform, China Development Bank has found a good solution to the problem of asymmetric information. In this paper, China Development Bank's credit guarantee system is analyzed. This platform is not private and closed. Taking full advantage of the platform, the commercial financial institutions will make a breakthrough in the field of SME financing. It is not only the growth point of the banking business, but also upgrades banks operational capacity. On the other hand, it is helpful to economic construction and improvement of the financial system. This paper introduces an applicable procedure to resolve SME's financing difficulties, including specialization, long-term customer relationship, loan commitments, customer information system, information released by third party, and so on. In this mode, the bank could plan their new loan businesses more effectively and improve ability to prevent or defuse financial risks. As financial regulation was gradually tightened, the proportion of non-performing assets of our banks will decrease. As the small and medium enterprises position themselves clearly and improve their core competencies, they will continue to make contributions to China's economic development under internal and external force.