The Study On Financing Decision Of Micro-Enterprises In Chongqing

Micro-Enterprises, as most active economic organizations, have made a greatcontribution to world economics and played a most important role. Micro-Enterprises inour country also have done a good achievement. Although, in2005, micro-enterprises inChina accounts for more than60percents of the GDP, about75percents of theoccupations and nearly50percents of the governments’ tax income and export income,the financial status of the micro-enterprises is not consistent with the contribution of themicro-enterprises. According to the “Chinese private enterprise operator questionnaireinvestigation of2005”, about75percents of the private enterprise operators reckon thatthe main obstacle during the process of enterprise development is the financingdifficulty, and, particularly, more the80percents of the private enterprise operators inmiddle and west area have the same opinion. By the end of2011, according to theinvestigation in17provinces implemented by The National Association of Industry andCommerce, about90percents of the investigated micro-enterprises can not receiveloans from banks, at the same time most of them have a bad survival condition, and abig pressure of profiting. Recently, the central government has made a great effort toimprove the survival environments of the micro-enterprises and improve the financingenvironments of the micro-enterprises through many channels. Although a lot of effortson promoting micro-enterprises’ financing ability have made, as the natural faults of themicro-enterprises in defending risk exist themselves, the high financing costs orfinancing failure still is an obstacle factor to the development of the micro-enterprises.And this is the main bottleneck for the development of the micro-enterprises.We have used optimal control theory and made a financing decision model of themicro-enterprises to analyze the relative factors about the financing decision of themicro-enterprises in the thesis, and we have also provided some good and professionalsuggestions for our government in making policies on supporting micro-enterprises. For the sake of convenience, we divide the financing channels into two channels those arefinancing from private and financing from banks and other financial institutions. In thelight of different channels with different costs and freely choosing of themicro-enterprises, we have discussed the optimal decision of the micro-enterprisesunder different situations. Through the investigation of micro-enterprises’ developmentconditions in Chongqing, we have analyzed the relative factors about the financingdecision of the micro-enterprises in Chongqing from overall situation, industry anddistricts three dimensions. And we get some conclusions as follows:(1) financingdecision of micro-enterprises in Chongqing is mainly influenced by the potential costsof the bank and other financial organizations, the interest rate of the bank and otherfinancial organizations, the interest costs of private financing and the commission of theprivate financing;(2) micro-enterprises in different industry and in different districts inChongqing are influenced a little differently by the factors in their financing decisionprocess. Finally, combining the needs of micro-enterprises in Chongqing, we also givesome good and professional suggestions on improving the financing environments andfinancial efficiency in the paper.