Research On Trust And The Domestic Medium-and-small Enterprises’ Financing Problem

After30years’reform and opening policy, there are more and more small and medium enterprises in China. So far, the number of SMEs that registered has reached more than15million, which accounting for99%of the whole enterprises in China, and theses SMEs have made tremendous contribution to China’s economic development. The facts above proved that SMEs are the most dynamic groups in China’s market economy, and they are playing an irreplaceable role in expanding employment, spurring economic growth, increasing the national revenue, promoting technological innovation and keeping a stable society. According to some statistics, the SMEs have created60%of the national GDP, and the taxes they paid accounted for40%of the whole, and provided about60%of the exports and75%of the urban employment.Given the important position of SMEs in the national economy, the country has paid a great attention on them, and has introduced various policies to support them. Under the great support from the government, the survival environment of the SMEs has improved a lot. After the appearing of the launch of Small board and the GEM, also goes along with the introducing of private capital, SME debt and venture capital institutions, the financing channels has been expanded greatly. While, due to the financial system and the weaknesses in themselves, there exists a big gap between the demanding for supporting the SMEs and the reality of poor financing channels. The problem of lacking money is very normal for the SMEs, which seriously hampered the healthy and rapid development of the economy. Considering the institutional barriers and structural imbalances in indirect financial market, and under the condition that the direct financial market is not mature enough, we need to look for other ways to solve the problem of financing difficulty, and further improving the financial system and using multi-channel to support the SMEs is a good way. With the background that the financial marketing structure cannot adequately address the financing difficulties of SMEs, as a new financial industry which can cover capital market, monetary market and industrial market, the Trusts are playing a more and more important role in our society. According to the latest data released by the China Trust Industry Association, China’s Trust Company assets under management has reached4811.438billion Yuan by Dec31,2011, and this number was only940billion Yuan in2007, and has achieved a five-fold increase in4years. The rapid development of Trust provides a new chance to solve the problem of financing. Based on trust and property, the Trust is a property management system in the way of commission. The Trust has highly flexibility in the operation, and its characteristics that having flexible deadlines, moderate cost, risk diversification, and covering a wide range make the Trust to connect the financing demand of the SMEs very well.This paper comes out under the above circumstance. Based on the full comparative analysis of various financing channels for SMEs, and through explaining the Trust theory and financing characteristics of SMEs, this paper will point out a new channel to solve the problem of financing through Trust model. Then combined with the current market, the author will sum up several main financing models with Trust theory, and this paper will also do some research on the feasibility, operational efficiency and social effect of the model above by connecting some certain case. Finally, combined with the characteristics of small loan companies and leasing companies, the author will propose two new models of the Trust financing of SMEs.