Small And Medium Banks’ Role In Smes’ Financing

No matter in developed or developing countries, SMEs both play a very important role in improving the degree of market prosperity, increasing employment and creating social wealth. In China,99percent of the enterprises are SMEs, they are an important component of the national economy. But until recently the financing support of SMEs did not match their status and role in national economy, the financing difficulty problems have still become a bottleneck restraining their development, how to solve the financing problems of SMEs have been great concern in all sectors of society. SMEs can only get financing from bank among all financing channels. Most of the scholars and literature think that big banks dominate the current bank market and in favor of the large-scale enterprises, medium and small banks take SMEs as it prime loan target and they have advantages in lending to SMEs. In China after years of development, the medium and small banks have become an important force of China’s modern financial system, they have made certain achievements in providing loans to SMEs, but why does SMEs’ financing problems have not been totally undone. In addition, deposit interest rates liberalization in china entering a critical stage in2012, the profit mode of the medium and small banks is being challenged, the medium and small banks urgent need to make market position quickly and accurately to ensure its sustainable development in future. This paper combines the SMEs financing with the development of the medium and small banks to study and explore the relationship between them from both theoretical and empirical aspect, which should have great theoretical and practical sense.At first, this paper introduces the financing status and the development status of the medium and small banks, consisting of the important effect of the SMEs in society, financing constraint conditions the SMEs faced and the survival and development of the small and medium banks after interest rates liberalization. Secondly, in order to analyze theoretically the relationship between the SMEs financing and the development of the medium and small banks, this paper expounds the relevant theory, including asymmetric information theory, credit rationing theory, relationship lending theory, small bank advantage theory, which constitute the theory basis of the article. On the theoretical basis, the paper uses the data from the macro and micro levels for empirical study, reveals the importance of the medium and small banks on easing the financial restraint of SMEs, and analyzes the actuality of empirical conclusion. Finally, according to the problems existing in reality, this paper put forward some suggestions and strategies.