Improve Institutional Arrangements For Commercial Banks’ Financial Services To Small-and-micro Enterprises

With an analysis on the status quo of commercial banks’ financialservices to small-and-micro enterprises, this paper points out that twopredicaments-small-and-micro enterprises’ high risks and informationasymmetry-are the major reasons undermining commercial banks’financial services to small-and-micro enterprises. Based on thisjudgment, the author suggests that effective institutional arrangementsinvolving more external forces are needed, as pure commercialbehaviors of banks are unable to fully solve the two predicaments.To set up institutional arrangements, international experience canserve as a good reference. A detailed introduction of global bestpractices is also offered in the paper, including legislation in favor ofsmall-and-micro enterprises and related financial services, specializedpolicy financial support, sound guarantee system for small-and-microenterprise financing, credit information and rating system forsmall-and-micro enterprises, differentiated supervisory, fiscal and othersupporting policies.