China's Sme Credit Guarantee Institutions, The Mode Of Operation

Credit guarantee institution for medium & small-sized enterprise arises with the commercialization reform of our banks and solving the problem of medium & small-sized enterprise's difficult financing. In spite of the development during several decades, its running pattern and risk precaution are still immature. Starting from the perspectives of economics and the reality in our country, the paper illustrates the necessary existence of credit guarantee institution for medium & small-sized enterprise and emphasizes its functions such as revising asymmetric market information, facilitating the implementation of macro-economic policies and perfecting credit economy etc. It focuses on analyzing how the operational process of guarantee institution handles the relationship between enterprise and bank and forwards four methods to precaution against risks for the guaranteed, guarantee institution itself and bank respectively, i.e. finding the breaking point, carrying out guarantee and venture investment meanwhile, enhancing anti-guarantee measure and sharing risks with bank etc. Following above, it puts forward improving operating model of Oriental Wisdom Guarantee Co. Limited. At last, the prospect of establishing credit guarantee system on standard operation, sound law system in China.