Sme Financing Product Innovation

Nowadays, the number of Chinese small-and-medium sized enterprises are getting larger and larger, and those companies are performing in the role as the main forces of the entire social economic development, which not only brought the growth of Chinese economy and technology, but also offered more available jobs, stimulating private investment and making significant contribution to the stability of the whole society. However, limited to its assets and credit, SMEs are facing financing constraints and those constraints are becoming'bottleneck'. With the constant deepening of Chinese economic reform, the subject on how to solve financing problems of SMEs has become the common concern by the government, enterprises and research scholars.Based on information asymmetry theory, this essay has adopted comparative advantages analysis, the feasibility and case analysis methods to present the financing obstacles SMEs are facing. This essay also took the steel industry and automobile fitting market as examples in order to analyze the obstacles that Chinese small and medium banks suffered when they tried to offer financing service to SMEs and business opportunities that small and medium banks have in providing financing services to of banks'product innovation, while emphasizing the improvements that Chinese enterprises have to do for its quality and policy supports that Chinese central government hold out.Lastly, this essay concluded that on one hand, Small-and-Medium Banks should correctly determined its roles and business focuses in SMEs'financing businesses through comparing the feasibility of product innovation between State-Owned-Banks and Small-and-Medium Banks such as SDB and referring to the lessons from foreign banks. On the other hand, this essay thought Small-and-Medium banks should make full use of their comparative advantages to make innovations in SMEs financing services especially in supply chain financing and collaterals borrowings. Consequently, Small-and-Medium banks will not only expand the financing channels for SMEs to give enough support for their development but also capture more market share, which is of great theoretical, practical and realistic sense to the development of Small-and-Medium banks.