The Improvement Of Legal And System Of China’s SME Credit Guarantee

Small and medium-sized enterprises (SMEs) are playing an important role in ournational economy. However, their development is seriously restricted by the difficultyof financing, which has become a prominent problem in national economic evolution. Inour country, credit guarantee is an effective way to solve the financing difficulties, andit has developed in some extent, but far from standardized.Based on the research about historical evolution and current status of China’s SMEcredit guarantee system, this paper points out that legislative level of China’s SMEcredit guarantee system is below average; the standard and definition of SMEs areimpertinent; protection about the rights of security institutions from relevant law isnot sufficient; the provision about the credit guarantee in “law on promotion of smalland middle-sized enterprises” is relatively abstract; the government regulation systemand credit guarantee risk sharing mechanism are imperfect; the internal governance ofSMEs is not standardized.This thesis studies the historical evolution and present situation of SME creditguarantee system in developed countries and makes a comparative research. Accordingto analysis, it has a conclusion that the credit guarantee law system in developedcountry is relatively perfect, and their credit guarantee institutions have establishedrelative mature risk control system. The government departments in developed countriesdon’t intervene in operation and business of guarantee institutions directly. Meanwhile,risk dispersion and compensation mechanism in developed countries are relativelyperfect.This paper aims to establish China’s SME credit guarantee law system from fiveperspectives. These five perspectives are as follows: the establishment of SME credit,the building of credit guarantee system, the construction of legal procedure, the development of risk dispersion mechanism in credit guarantee institutions as well as theestablishment of government administrative system.As to the credit culture, this paper proposes that the standard of SME should bedefined once again in a legislative way. In order to strengthen national SME creditguarantee management and promote the development of enterprise credit level, weshould perfect SME internal governance system; establish enterprise credit managementstandards; enhance information disclosure mechanism; establish SME credit system;strengthen legislation on SME credit behavior and perfect legislation to develop SMEcredit evaluation.As to organization system, this paper maintains establishment of organizationregulations and laws on credit guarantee institutions, and it means to standardizeinternal governance structure of credit guarantee institutions. Meanwhile, it tries toestablish a sustainable SME credit guarantee system and expand financing method onSME credit guarantee institutions in order to form a pertinent SME credit guaranteeorganization system which is fit to national conditions.As to guarantee procedure, this paper means to bring chattel mortgage and floatingmortgage into the practice of credit guarantee, standardize and perfect operationprocedure of guarantee business, establish perfect credit investigation system, build riskwarning system about guaranteed project and construct supervision mechanism onguaranteed enterprises so as to enhance risk control system.As to establishment of risk dispersion system, this paper aims to develop nationalmicrofinance system and establish re-guarantee system as soon as possible, enhance risksharing system with associated bank, establish rigid anti-guarantee system, perfect riskcompensation system, strengthen the ability of credit institution to withstand risks inorder to enhance risk sharing and compensation system.As to enhancing administrative regulation system, this paper maintains that thegovernment should establish nationwide SME credit guarantee supervision system, institute government regulation content as well as responsibility, enhance long-timesupervision and standardize the order of credit guarantee market, which aim to establisha just, objective, effective and uniform credit guarantee supervision and regulationsystem.