Study Private Financing Zunyi SMEs

In practice, the financing difficulty of small and medium-sized enterprises (SMEs) has troubled both in developed and developing countries. The SMEs, in china, are a main way to drive Chinese economic growth and promote innovation. It is interdependent and interactive with private economy. Inevitably, grounded on the financial repression, the world-wide puzzle of SMEs financing has not been solved in China.The private finance, which is named "informal finance" in other countries, is means of financing for several hundred years in China. The theoretical study on the origin of the informal finance and the reason of its development has been explored by many scholars. The theories of financial repression and information asymmetry are acknowledged as a foundation by many researchers, and some professors try to analyze the financing difficulty of SMEs in China by introducing the theory of enterprise finance and "the Macmillan gap".In order to relieve the issue of the SME financial difficult and make suggestions to promote the economic development, this article focuses on an undeveloped area, specifically on Zunyi city Guizhou province, and adopts the fuzzy comprehensive evaluation model to analyze it. The conclusion of the article is expected to make up the blank of the study in this area. Meanwhile, the SMEs in Wenzhou are used for reference in the paper, because private finance in Wenzhou is well developed with a wealth of experience.Based on the theories of enterprise finance,"the Macmillon gap", financial repression and information asymmetry, and combined with the situations of studied markets, the article draws three conclusions. Firstly,"the Macmillon gap" is serious in the group of SMEs which are regarded as an essential part of Chinese economic development. The main reasons are financial restraint and asymmetry information between banks and enterprises. Secondly, as the non-government finance has been taken shape, it has gradually been taken seriously by Chinese government. The interaction of demand and supply are a reason of the private finance emerging. Thirdly, there are some restricts in practice, but theoretically the SMEs in Zunyi market have certain conditions to access to capital through the informal finance channel. At the last, to promote Zunyi’s economic development, improving financing conditions of SMEs and using the private finance properly are necessary.There are large aggregation of studies concentrated on theories, empirical investigations and models of private finance, and their common traits are more qualitative, less quantitative, lack of data and hard to simulate. In addition, compared with a lots of studies focused on the developed areas on the coast, only few research results of private finance and SMEs financing in this area have been gained. What the innovation of the article is that according to the developing situation of Zunyi’s SMEs, the paper comparatively analyzes the growing path of private finance both in Zunyi and Wenzhou from industry environment, financing conditions and policy environment three aspects by selecting the fuzzy appraising model and the hierarchy analysis method. After combined Zunyi’s own situation with the developing process of Wenzhou’s private finance, the article is expected to solve the problem of the SME financial difficult in Zunyi, to some degree, and promote the development of regional economy sequentially.