A Study Of Financing Problems For SMEs

The small-mid enterprises (SMEs) at present are the most dynamic part of the global economy. In China, the SMEs have play an increasingly important role in ensuring the development of national economy, easing the employment pressure, promoting technological innovation and perfecting the industry structure. However, the financing problem has become more and more serious in the development of SMEs, which is the bottle-neck for their further development. The financing problem is present in every country in the world to some extent. In western developed countries, the financing problem has been solved effectively owing to their sound legal system, perfect finance system and dynamic finance market. Now in its special stage of market economy in our country, the relevant rule of law is not perfect, the finance system not sound, the operation of finance market not standardized, the SMEs not self-sustained. Therefore, the financing is more difficult in our country than in other countries. So the study of financing difficulties for SMEs in China and corresponding measures would be of great theoretical and practical significance.Based on the current financing state of SMEs in Tai'an city, this thesis would make a study of their current state and underlying reasons. After research, the reasons for SMEs'financing difficulties could be devided into two aspects in general: internal reasons and external reasons. The internal reasons include the unreasonable structure of SMEs, the low-level management, the loss of credit culture, the low profit ability, the risky management and incapbility for repayment of capital. The external reasons include the uncomplete supporting system for SMEs, the incapability of small-mid financing institution for supporting SMEs, the lack of regional civilian financing institutions and dissymmetry information and so on. If the SMEs, financing institutions and government could work together, the financing difficulties would be solved gradually. The thesis used the financing of SMEs in Tai'an city as a case for study.Taking into account the characteristics of Tai'an city and the specific current state and difficulties of SMEs in Tai'an city, the underlying reasons for financing difficulties were studied in detail, which include the SMEs'own reasons, the governmental reasons and so on. In the initial stage of market economy, there are not only difficulties but also the opportunities for the SMEs. In China, the healthy development of SMEs would ensure the perfection of market economic mechanism. Based on the present national policy and the borrowing of foreign advanced experience in the solution of financing problems, the new ways conforming to our situation were created to solve the financing difficulties effectively. And then, the SMEs in China would survive the depression and the solid foundation for their development would be laid. Eventually, the SMEs would have a unique function in national economy and make great contribution to the economic development and national prosperity.