The Impact Of Credit Management Of SMEs On Financing Decision

With the development of our social economy, the development of small andmedium-sized enterprises (SMEs) has now burst out the vigorous vitality, esp. in thequality and quantity which are much more improved than before. SEMs have played animportant role in the whole national economy of our country, and contributed much tothe implementation of the policy of promoting "the people’s livelihood, andemployment". However, because of the system of market economy and laws andregulations in our country are not perfect, many problems have appeared in the rapiddevelopment of the small and medium-sized enterprise, the primary one of which is theproblem of financing. This paper tells us that it is the poor credit quality of SMEs thatcauses the difficulty of financing.The domestic and foreign scholars have conducted multi discussion for the creditmanagement and financing decision of SMEs. But such discussion is often doneseparately, that is, respective discussion of the credit management and financingdecision of SMEs, or part of them are discussed. The significance of this paper is topromote the quick construction of credit management system of SMEs so as to solve thefinancing problems through the research on the establishment and implementation ofcredit management system for SMEs, thus causing influential effect on the financingdecision.This paper first summarizes the relevant research achievements of domestic andforeign credit management and financing decision of SMEs to obtain the theory basisfor the paper. Secondly, this paper offers the careful analysis of the status of creditmanagement and financing decision of China’s small and medium-sized enterprises.After analyzing their correlation, this paper puts it forward that it is helpful to enhancethe concept of credit financing by maintaining integrity management and improvingstaff quality. Thirdly, based on the solution to the financing problem, it discusses thethinking of the construction of credit management of China’s small and medium-sizedenterprises, and presents the necessity of building a credit system for SMEs, andelaborates the internal and external factors of hindering construction of this system.Finally, this paper set forth the suggestions about establishment of the system for thecredit data collection, the development of credit rating agencies to improve SME creditinformation transmission, the establishment of credit management system in the small and medium-sized enterprise with the functions of the government, and the legislationto regulate credit management of SEMs to promote the construction of creditmanagement of SMEs in china.