Comparison Of Advantages In Lending To SMEs Between Banks Of Various Scales

With the deepening of China’s economic development, SMEs have become an important pillar of our national economy. SMEs have played a significant role in creating jobs, increasing market efficiency, technological innovation and expanding exports. The end of 2010, the state in the development of the "the twelfth five-year-plan" made it clear that at this stage to develop SMEs in almost all reflected in the new industries to adjust our economic structure, transform the mode of economic growth. We can expect the development of SMEs in the wave of China’s economy will play an increasingly important role. At the same time, the development of SMEs are also facing many difficulties, including the problem of financing has become a most important factor. Help SMEs solve the problem of financing, not only can promote China’s sustained and rapid development, economic structure is also an important guarantee for a successful transition. In our current financial environment, the SMEs financing channels are limited and not clear, bank credit facilities for SMEs to obtain the most important foreign financing. Therefore, from the perspective of bank credit facilities to study how to improve the financing situation of SMEs in China has practical significance.Many scholars believe that small and medium banks on credit facilities for SMEs compared to large banks have a comparative advantage, more suitable to provide loans to SMEs. There are also some scholars have expressed doubts that the big banks lending to SMEs is the best choice. However, they study a single point relatively. This paper attempts to compare the different scale of bank credit multi-dimensional in the SMEs credit market, the banks lending to SMEs in their respective advantages proposed on the basis of overall balance, arrive at a more complete conclusion.Academics generally believe that cost and information advantages of banks of different sizes are considered credit market for SMEs to compete in the most critical factor. This article first compare the cost of funds of banks of different sizes, the results found from whether a single indicator or integrated indicators, small and medium banks cost of funds is generally lower than the big banks. Then learn from Besanko and Thakor (1987) model, in the small and medium banks with the premise of information superiority analysis different characteristics of commercial banks when the credit market equilibrium. It was found that small banks would give up collateral requirements for loans to SMEs, while large banks will abandon the collateral requirements of high-risk;when cost of funds of the small banks is less than big banks, small banks will get all the enterprise; when cost of funds of the small banks is equal to the big banks, big banks and small banks share the high risk SMEs. Therefore, under the conditions of information superiority, small banks provide SMEs with better loan contract than big banks. Next, the author conducted a comprehensive comparison the information advantage, risk management and lending technology on three areas of the banks of different sizes. Study found that from information superiority, the small and medium banks in the information collection and information acquisition incentives are superior, and large banks leading in information processing; In risk management, from four areas proved that the big banks have a comparative advantage; in the aspects of technical loan, with the development of information technology, big banks with the credit scoring technology will challenge the relation lending between small and medium banks and the enterprise. Finally, I found that we should not stick to debate the advantages between big banks and small banks. Banks of different sizes should make full use of their own advantages, mutual cooperation, jointly solve the financing problems of SMEs in China. And put forward five suggestions:innovative consistent with the characteristics of SMEs lending technologies, establish a sound credit rating system for SMEs, multi-level system of bank financing, incentives of bank credit constraints and multi-level legal system.