The Study On Relationship Financing Between Commercial Banks And Small And Medium-sized Enterprises

Along with the ever-deeping reforms and development, the commercial banksand small and medium-sized enterprises are Accelerate their Development strategiesin the environment of economic transition, the role of Bank-enterprise cooperation instabilizing the national economy and coordinating social development became moreand more prominent. But the financial market system is not perfect and the operatingenvironment is poor for SMEs in transition Period, financing has become a majorbottleneck that restrict the development of SMEs, how to solve financing problemsof SMEs has also been a focus of community social issues. And since the1990s, theoretical research and practice of some countries have showed that, relationshipfinancing which based on "soft information" and long-term relationship financing isuseful to reduce information asymmetry, reduce financial transaction costs, andprovide a selection of path to effectively alleviate the financing constraints for SMEs.The relationship financing is not only as financial analyze tool, but also as a specificmeans of financing, so this paper will start from this basic point to analyze anddiscuss the predicament of SME financing difficulties.The paper will study the function and mechanism of relationship financing on thebasis definition, emphasize that relationship financing paly an important role inreducing financing costs, improving the information structure and financing efficiency,keeping long-term bank-enterprise cooperation. By Empirical model to analyzerelationship the effect on the loan pricing and the availability of financing forSMEs,compare the game between once credit trading and multi-credit trading, andfind that the reputation and cost which are produced by relationship financing, have athe strict constraints function on the latter credit action of SMEs, that maintenancerelationship between commercial banks and establishing the integrity image havebecome the optimal choice for SMEs, this action will solve adverse selection andmoral hazard problems in the process of SME financing.This study also give a preliminary exploration about finance theimplementation subject of relationship financing, the organizational structure, formgeographic attributes, competition, and other factors of commercial banks, are allconsidered in this paper. The paper hold that our small and medium financialinstitutions have a comparative advantage in developing the relationship financing toextricate SMEs from a financing predicament, especially, franchise financing bank engaged in the relationship financing will be a innovative model that is adapt to thecharacteristics of SMEs.Finally, the paper analyzes the current situation of SME finance, the systemchanges of commercial banking system and the evolution, the drawbacks and defectson traditional relationship between banks and SMEs, and by drawing on therelationship financing of American community bank and Japan’s main bank, bycomparing analysis the lessons to explore the relationship of China’s SMEs financing.Because China is still in Unstable economic transition period, the environment ofrelationship financing for SMEs is not sound, it also need the government tostrengthen the system of external aid, SME to practice their quality, commercial bankto innovative credit model and other multi-organizational joint efforts to build thesymbiotic and interactive relationship between banks and SMEs, to promote therelationship financing became an alternative financing model in the growth of SMEs.