Enhance The Co-operation Between Credit Guaranty Institution And Associated Bank, To Efficiently Solve The Financing Problems Of SMEs

The financing difficulty of Small and Medium Enterprises (SMEs)is one problem that China needs to solve for its economic development. At present, the main financing way of SMEs is bank financing. Due to poor internal management, distort financial information, low-quality product and technology, low-effective property and high risk financing, not to mention lacking of qualified guarantee system, it is difficult for them to get bank loans. Among those SMEs who lost the chance to get banking financing, there includes those with high potentials for further development.There are a lot of questions about the credit guaranty system to solve in theories and practices because it is in a initial stage. The aspect of the co-operation of credit guaranty institution and associated bank is hardly studied. However, the co-operation of credit guaranty institution and associated bank is most important to perfect credit guaranty system. If under inefficient cooperation, the SMEs can hardly receive any aids. Therefore, this paper tries to study deeply the current situation of co-operation of credit guaranty institution and associated bank. To solve the financing question of SMEs and advance the development of SMEs, the credit guaranty institution should establish the strategic partnership with the bank,The thesis can be generally divided into five parts as follows:Chapter one introduces the background and practical meaning of the topic. On reviewing the relative works on co-operation between credit guaranty institution and associated bank in and abroad, we find the solution on the basis of the difficult financing problem of SMEs, so as to give out the major focus of the thesis—enhancing the co-operation between credit guaranty institution and associated bank to solve the financing problems of SMEs. Meanwhile this part tells the general content and the clue of the research.Part two tries to explain why the co-operation between credit guaranty institution and associated bank can solve the financing problem of SMEs from the points of economical theories. At first the thesis contributes the financing problem of SMEs to Information Dissymmetry. Then we choose to explain the reasons in terms of transaction cost and credit rationing theory. By analyzing the quality of the credit guaranty products and the efficiency of the co-operation between credit guaranty institution and associated bank, we have posted the inner economic reasons. Together with the cost-and-revenue curve, we have found out the operating reasons of financing problem of SMEs.Part three takes the present situation of co-operation between credit guaranty institution and associated bank into consideration. Firstly the way of its development and then comes for the comparison between different modes of co-operation between credit guaranty institution and associated bank all over the world. On basis of that, we have concluded the present obstacle and constriction right through the co-operation between credit guaranty institution and associated bank in China. By pointing out those key issues, a firm foundation of the research has been solidated.Part four tries to summarize the advanced experiences of co-operation between credit guaranty institution and associated bank in and abroad through comparison. On behalf of those advanced countries, we here take America and Japan as example to bring in those advanced experience. Firstly here generalizes the major characteristics of their credit guaranty system, and then their diverse co-operations between credit guaranty institution and associated bank are taken into consideration. By absorbing their elites, we can explore the way of co-operation between credit guaranty institution and associated bank of our own.As both focusing on the ratio of risks taken by their own, we have to find out how the credit guaranty institution and associated bank share the risk. Upon the mathematical model we have built, those key issues which have highly affected the risk ratio appears to be clear. Then it is easy for us to give the practical suggestions to enhance the co-operation between credit guaranty institution and associated bank. All in all we can realize the goal of supporting those SMEs.We use the theory of information asymmetry, the theory of risk shift and transaction cost theory to provide the rational basis for the existence of the co-operation of credit guaranty institution and associated bank. This paper has brought in the general introduction of the current situation of co-operation between credit guaranty institution and associated bank, which contains not only the respective restrictions but also the obstacles right through the cooperation. Through introducing the experience of Japanese and America, we should consummate the co-operation between credit guaranty institution and associated bank in credit guarantee system. In view of the game theory, the paper studies the conditions on which credit guaranty institution and associated bank are ready to collaborate. This facilitates credit guaranty institution to advance ability and brings forward the government liability and duty. On the basis of those, mathematical models which figures out the fund scale of credit guaranty and the proportion of responsibility of guaranty is to be established applying to non-linear programming theory and the conditions of co-operation which can realize the co-operation objects of credit guaranty institution and associated bank are studied. So it can advance the effective co-operation of these two organizations. Lastly, we put forward the concrete suggestions on their co-operation in terms of three aspects: the credit guaranty institution, the associated bank, and the credit guaranty institution and associated bank as a whole, so as to solve the financing question of SMEs and to advance the development of SMEs.