A Study On The Public Service System For The Financing Support Of Medium And Small-sized Enterprises

Since the establishment of "SME Promotion Law" (law of the people's republic of china on promotion of small and medium-sized enterprises) in 2003, our government set a policy goal on the problem of financing difficulties among small and medium-sized enterprises. With quite a few constructive measures, we have achieved a gradual success. At present, the problem of financing difficulties has almost been solved among the medium-sized enterprises, but it is still serious in small-sized enterprises. Therefore, it should be the focus for the next phase. The purpose of the present paper means to urge the government to scientifically define the small and medium-sized enterprises, to construct a public service system which supports the financing of small-sized enterprises so that their financing problem .might be solved in essence.This paper consists of five parts. Part one: introduction. Part two: the theoretical basis for the government to support the financing of small and medium-sized enterprises. This part has introduced the theories about market failure, public goods and public service. It has proposed that the theory of public service should be employed to direct the construction of public service system for small-sized enterprises. Part three: the general situation of our country's support to the financing small and medium-sized enterprises. In the first place, it analyzed the present difficult financing situation of small and medium-sized enterprises, especially the small-sized enterprises which are the main problems. Second, it analyzed in detail the reasons of financing difficulties for small-sized enterprises which was mainly resulted from the weakness of public service. Third, it analyzed from eight aspects the deficiency of public service in supporting the financing of small-sized enterprises. Part four: the reference of public service system for small and medium-sized enterprises in the United States and Japan. Considering the reality in China, it particularly introduced the experimental experiences of the two countries to support the financing of small and medium-sized enterprises. Part five: suggestions on the construction of public service system for small and medium-sized enterprises. For example, to scientifically define the small-sized enterprises, to establish a unified administrative agency, to perfect the law system, to put the financial support policies into effect, to perfect the financial and tax policies, to improve the credit guarantee system, to perfect the credit evaluation system, to construct and better the infrastructures of community banks. This part has described from eight aspects about the unified, mature, and perfect public service system for small-sized enterprises.At present, more than 65 percent of the financial resources have been controlled by the national commercial banks and corporate commercial banks. Market positioning of city commercial banks is not clear. Community banks start to appear. The influence of capital market on the financing of small-sized enterprises is limited. Considering the above mentioned situation, author of the present paper proposed a general idea for the public service system to help solving the financing difficulty of small-sized enterprises. It should first of all solve the difficulty of indirect financing, and then gradually solve that of the direct financing. For the fist step, it should scientifically define the small-sized enterprises. The actions should be based on law system, directed by supporting policy, and pushed by the investment public sources. It should not only drive the major banks to support the small-sized enterprises, but also probe for the road of establishing community banks to meet the financing need of small-sized enterprises. As to the aspects of administrative management and service, administrative bureau for small-sized enterprises is preferred.