The Research On The Group Lending Mode Of SMEs In China

The SMEs in China is growing stronger with the development of the reform and opening process, especially after China had formally entered the WTO. They play more and more important role in the economic prosperity, increasing the employment, promoting the innovation, improving people's livelihood, and have been the important part of the nation's economy and social development. At the same time, the biggest challenge facing the SMEs is their difficulty in financing. Because the SMEs are often weak and small, lack of guaranty, and their financial informations are difficult to gather, with the imperfect of the social guarantee system, commercial banks always refuse to provide loans to SMEs.Group lending can resolve the difficulty in SMEs'financing which are lack of security methods, and reduce bank's risk in the information dissymmetry. It coincidents the financing need of the SMEs, shows a nice demonstration and sustainability. However, the developments of group lending in SMEs still have some problems. Some enterprises are afraid of the joint and several liabilities. The financial institutions have no interesting in providing loans to SMEs because of the high risk of this product. So the main purpose of this paper is to improve the mode of SMEs'group lending, and to give some recommendations to the mode of SME's group lending.This issue gives focus to 4 questions.1. The practice of the SMEs'group lending in China.2. The main mode of the SMEs'group lending in China.3. Compare the group lending mode with the international cases.4. Give some recommendations to improve the mode.This issue gets some conclusions as follows:1. The group lending mode could resolve the information dissymmetry in SMEs'financing difficulty, with the mechanism of auto filter, bilateral surveillance, co-payment and triangular benefit, which should be promote in the SMEs'financing field.2. In practice, the SMEs'group lending has some growth in our country. It has 2 main modes---mode of network group lending, and mode of chamber group lending---both of which need the third part to join in the credit relations between the commercial banks and the enterprises. 3. This paper designs a SMEs'group lending mode with the support of the government, and the chamber of commerce as the third part. It's an improvement of the existing mode. This mode could achieve better effort with the connection of commercial banks and SMEs into the risk guarantees.4. The SMEs'group lending mode with the support of the government, and the chamber of commerce as the third part needs the perfect of the risk system, security regulations, and the supporting of the intermediaries.To improve the SMEs'group lending mode is a very important and challenging issue. However, there is no standard in this field to follow. This paper tries to design a better mode of the SMEs'group lending. But it still has more deficiency to research.