Development And Improvement Of China's Sme Financing Guarantee System

Small and Medium Enterprises(SMEs)of our country havedeveloped rapidly since the Policy of Opening and Reform. The positionof SMEs in national economy is outstanding day by day. At the same time,we must be aware that a variety of shortages inhered in SMEs restrict thenormal growth of SMEs. The most evident embarrassment is lack ofcapital and financing problem. Through analyzing realistic conditions andapproaches in SMEs financing, we have discovered that the effectivemeans for resolving the problem is establishing the SMEs creditguarantee system refer to the international traditional practice. Theselection of the subjects for this article is just based on this issue ofpractical significance. The article is according to the logical thinking ofexpatiating the general picture of the SMEs credit guarantee system andthe operation mode.Comparing and analyzing the characteristics ofvarious system and operation mode, constructing and perfecting SMEscredit guarantee system in China. Firstly, we discuss the essential relevant definitions of SMEs creditguarantee system. Such as the definition of SMEs;the definition of SMEsfinancing;the definition of SMEs financing credit guarantee system. Secondly, we discuss that the meaning of developing and perfectingthe financing credit guarantee system of SMEs of our country throughcomparing, analyzing and using home and overseas' practical experiencein SMEs credit guarantee system for reference. According to the exteriorenvironment and development, characteristic,the fundamental operationframework and system of the SMEs credit guarantee institution in Chinaare designed,which include policy guarantee,commercial guarantee andmutual guarantee. But,because of the own defects in the credit guarantee system,policy guarantee and commercial guarantee are not developing well asexpected. The proportion of policy guarantee is too big,and commercialguarantee has a great of problems that need to be solved soon. So wemust develop mutual guarantee as well as we can be. Then,we analyze that we can develop mutual guarantee from thenecessity, feasible respects. Lastly, we draw a conclusion that we mustdevelop mutual guarantee well to overcome the defects that exist in SMEscredit guarantee system and improve this system performance. This kindof system innovation includes two aspects which are developing mutualguarantee in the credit guarantee system and improving the link of SMEscredit guarantee system from head to foot. The ways are encouraging theestablishment and development of mutual guarantee;enlarging the ratioof mutual guarantee in the credit guarantee system;establishing the riskcontrol and capital compensation system;establishing the SMEs creditsystem and establishing the small and medium sized financial institutions.