Pawn Financing To Ease The Financing Constraints For Smes In China

Small and medium-sized enterprises(SMEs) develop quickly since the reform and opening-up of China. SMEs begin to play a more and more important role in the national economy in different ways. According to the statistics of National Development and Reform Commission, the total value of final product and service created by SMEs accounts for about 60% of GDP in our country. Their products account for 60% of total sale sum in our society. They also contribute more than one half of the total amount of taxation. Moreover, they provide about 80% of the employment posts in our country.However, the financing problem is a big restriction to the development of SMEs. This problem exists more or less in many countries and regions, but it is much more obvious in China. SMEs can obtain a little amount of loan from banks, which only accounts for less than 30% of the total sum.The dissertation tries to discuss the feasibility that pawning can help relieve the financing problem of SMEs. Through the analysis of the advantages of pawning, this dissertation also provides some Countermeasures and suggestions for the pawning industry to develop and deepen the services for SMEs.The dissertation consists of four Chapters, which are organized as follows:1. SMEs play a more and more important role in the national economy in different ways. But the financing problem is a nasty puzzle which always restricts the development of SMEs. Based on the features of the operation and financing of SMEs, Chapter 1 believes that pawning can be used as a new financing channel for SMEs. This Chapter gives a brief review of the study about pawning both in China and in other countries.2. Chapter 2 discusses the feasibility of SMEs' financing through pawning in terms of different economic theories. First of all, Chapter 2 analyzes the different financing needs of SMEs in different development stages based on the Enterprise Life Cycle Theory, and believes that pawning do satisfies some financing needs of SMEs. Second, the Credit Rationing Theory explains that multiple financing channels are necessary because of credit rationing, and that pawning would ease the problem that SMEs are difficult to get enough money from banks. Then the coupling of SMEs financing and pawning is discussed. 3. After reviewing the history and current situation of pawning industry in China, Chapter 3 describes the features of the development of SMEs pawning in our country. Some problems still remain in SMEs pawning such as lack of funds, nonstandard supervision and increasing competition.4. Chapter 4 provides some Countermeasures and suggestions to promote SMEs pawning. The government must give a clear position to pawning in our financial system. The pawning industry should create more and more new service to support the SMEs and help to construct a platform for SMEs financing service. Moreover, there are many other important measures which should be taken to hasten SMEs pawning, such as pawning legislation, cooperation with other financial institutions, self-controlling of pawning industry, and the personnel training.