Our Country Small And Medium-sized Enterprise Financing Problem Analysis And Countermeasures For Selection

As a huge group, small and medium sized entities’ function taken in nationaleconomy becomes more and more important. Since1990s, China’s small andmedium sized entities’ role are treated as engine of economic growth, and createmassive of opportunities of employment and the special function in optimizing andadjusting industry structure is known to all. Small and medium sized entities haveplayed a key role in the development of China’s economy, and the improvement ofpeople’s living standard. However, from present situation, what makes SM&Esembarrassed is that the shortage of fund of internal development of entities, and theouter development needs are strong. This has formed a situation of incoordination ofinside and outside. Also because of the shortage of fund, it is hard for SM&Es toobtain new funds. Among the bottlenecks that limit the development of SM&Es,difficulty of financing has been the biggest and the most difficult problem that to dealtwith. With the continual reform of our country’s economic structure, how to solve thefinancing problem has been the common concern for government, researchers, andentities. Therefore, studying the financing strategy which benefit for the growth ofSM&Es, and satisfying the financing needs of SM&Es are the key factors to keep thecontinual growth of economy and entities’ vitality.Solving the financing problem of SM&Es fundamentally is like doing a hugeand meaningful project. Each step relates to the success of project. The factorsinvolved in this are: whether the credit environment is effective, whether thefinancing policy guideline is mature, whether the quality of service funds provided byfinancial institutions are in line etc. So the work that needs to be done is step by step,and overall planning. From the point of inside, while keeping the SM&Es surviving inthe highly competitive market, SM&Es need accumulate the energy for futuredevelopment, and improve own strength and quality. From the point of outside view,government has played a key role in SM&Es’ financing. The government takes thefunction of policy maker and helping small and medium sized entities in makingrelevant laws that are related to SM&Es’ development and financing. Also, the government needs to keep the credit system developing healthily. Only in this way,can we provide the outer environment guarantee for small and medium sized entities.Therefore, forming the financing service system that are good for the development ofSM&Es’ development is very urgent and important.Solving the difficulty of financing, not only need concern of the creation offinancing way, but also need the innovation of financing idea. We can’t rigidly adhereto one form of financing. The improvement of financial structure is also the key tosolving financing problem for SM&Es. Bank as a usual way to deposit and credit, hasplayed the key provider of fund for small and medium sized entities for a long time.However, with changing of business environment, bank as the way to financing can’tsatisfy the needs for financing of SM&Es. So vigorously developing the new form ofdirect and indirect financing is very necessary. Financial institution not only need toexpand the line of credit and innovate the way of financing, but also need to improvethe financing system, especially in direct financing area. Hope to set upmulti-dimensional, comprehensive and fair open capital market. Then make a newand good plat form for SM&Es to finance.According to China’s SM&Es’ feature, learning the international SM&Es’development experience, and combining the relevant theories of SM&E’s financing,we did a comprehensively and deeply research on SM&Es’ financing. With theanalysis of reasons that cause the problem in financing and strategic suggestion, Ihope this paper may provide direction and help for the study in China’s small andmedium sized entities’ financing field.