Research On Financing Problems Of Small And Medium-sized Enterprises (SMEs)

In the economic globalization today, the role in the development, small and medium-sized enterprises (SMEs) in economic development, employment and social cohesion is increasing. However, the SMEs business environment is not ideal, particularly in the financing of enterprises, has become the general constraints and a major bottleneck in development of SMEs survive. To solve the problem of financing of SMEs has become the current hot topic in academic circles. Because China is a developing country, so our country has a comparative advantage in labor-intensive industries, Chinese SMEs are mostly labor-intensive enterprises, SMEs. in general because of this small, little demand for funds, their product market and the technology used are relatively mature, so the main source of funding is the business owner:SMEs'own capital investment, direct financing through the capital market is very small, and through its own capital investment, most of the fund can only solve the short-term demand, which have determined that the main way of SME financing by banks, the financial intermediary of the indirect financing. This is also selected in this paper of the banking system financing problems for SMEs studies point of view causes.Chinese banking system current is mainly dominated by the state-owned monopoly of large commercial banks, while SMEs do not have full access to these large banks financial support. First of all, from the SMEs, the SMEs'business conditions information is introverted or disclosure is incomplete. Only the internal one can clearly understand the development of enterprises, operating conditions, while the external one is difficult to understand that internal information for SMEs. That is not as large enterprises, or SMEs, listed companies, the external people can through a variety of information channels to enterprises has a clearer understanding. Secondly, from the banks, the big banks from the cost-benefit considerations, and have no incentive to go one by one with knowledge of SMEs internal information. As the general purpose loans for SMEs is small, resulting in the unit cost of bank loans to SMEs than large enterprises. Therefore, a general bias towards big banks for large corporate loans, while small and medium banks due to their own funds smaller than the big banks, of its unique regional characteristics of the information on the level of understanding of SMEs and also larger than the big banks, so small and medium sized banks have the tendency of enterprises to finance, this article is from the perspective of a simple model, and combined with actual qualitative analysis of large banks and small banks a correlation analysis, and finally arrive at the smaller banks in financing SMEs have a comparative advantage, should be market positioning for the SMEs financing services. In arrive at this conclusion, the paper analyzes Chinese current banking system to the existence of institutional and institutional arrangements of the defects, try to find ways to solve the financing difficulties of SMEs and attempt to draw on China's financial system improvement and deepening of the banking system the reform of targeted conclusions.