Research On Group Loans Of SMEs

With the continuous development of our economy, SMEs is playing an increasingly important role in the national economy. But at the same time, the development of SMEs are facing many obstacles, including a prominent bottleneck is the difficult of bank loans. To solve this major problem, compared with conventional loans, group loans is definitely a good way. Group loan is a new loan, initially started in Bangladesh, Dr. Muhammad Yunus founded the Grameen Bank to the poor and provided loans to small business owners. The new loans in recent years by the theoretical and practical concerns of industry, and the carry forward to solve the difficult problem of small business loans.Using general techniques of traditional loans, bank loans for SMEs is difficult because information is not known mainly due to adverse selection and moral hazard problems, so that banks in order to solve the "credit crunch" problems, solve these two problems is the key. Different with traditional mortgage loans and secured loans, group loans needs no additional mortgage loans and external security. but because of its internal mechanisms of joint and several liability, to produce an invisible collateral effects. By comparing the operating mechanism of the group loans and individual loans, we can find that group loans can solve the problem of adverse selection in credit markets, to improve the "bad money drives out good money" phenomenon, making the low-risk type of business back to the credit markets, groups relative to personal loans loan interest rates reduced. Further analysis found that as the group by lower interest rates, allowing more companies to get loans.The next group loans by summing up the direction of moral hazard, the use of induction can be seen in the repayment of loans to individuals and groups the difference between successful organizations derive repayment rate of loans is better than personal loans, and through practical numerical example shows the size of groups on the loan repayment rate.And a form of group loans - Credit Union loans are also some areas in China have some practical application, although this is currently not fully realize the form of loans unsecured loans unsecured groups operating mechanism, but to a large extent difficult to alleviate the current problem of SME loans, with the future to further improve the operating mechanism, but also to the theory will be more perfect type of body development loans.Finally, a summary, full text of the proposed innovations and shortcomings, and future research on group loans and practice are discussed.