The Financing Difficulties Of SMEs In China

In recent years, small and medium enterprises in China’s economic and social development made a significant contribution. However, the small and medium-sized enterprises competitive weakly In the market, because they have many weakness and formal finance is not perfect. At present, small and medium enterprise finance serious problem. Informal finance exists crowding-out effect to medium and small businesses At the same time, the development of informal finance is not standard, hiding enormous risks. Financing problems is the bottleneck restricting the development of SMEs. The2008financial crisis hit small and medium-sized enterprises. Although the world economy is recovering, the deep impact of international financial crisis continues. The majority of small and medium-sized enterprises are confronted with severe challenge. Although the government publishs policy to give aid to medium and small enterprises, they solve only a few difficult of medium and small businesses. On the whole, the financing problems of small and medium-sized enterprises still stem.Through the earnest study,we realize that Improve the formal finance is the key to solve the problem. Informal finance exists squeezes out the effect in financing for small and medium-sized enterprises. But in our country, Informal finance should be the main financing channel for the development of small and medium enterprises. The sense is also very important to formal financial. However, some enterprises still have the demand of the informal financial. This paper constructs a partial equilibrium model, researching on formal financial crowding-out effect. Model based on empirical data, some useful conclusions are obtained. Small and medium-sized enterprises defects, informal finance is not perfect, government negligence are leading causes of financing difficulty of small and medium-sized enterprises. In short, in the developing informal finance should be the main financing channel of small and medium-sized enterprises...