On SME’s Financing Problem In The Marketization Conext Of The Interest Rate

Financing of SMEs is a worldwide problem, not a special phenomenon in China’sSME development. However the financing of SME in China have their own specialreasons. One of the important reasons is that interest rates forming mechanism is nottotally market-oriented. In this paper, combined with the experience of theinternational interest rate markets on the basis of analysis of the background of theglobal financial crisis, interest rates transduction chain of non-market impact on SMEfinancing.To solve this problem, we not only need the interest rate market reform, but alsoneed the government, the main financial markets, banking and enterprise to make jointefforts to make adjust to the new policy environment. First, the government need toprovide the necessary financial support, but also make efforts to strengthen thefinancial infrastructure, sound the financial system, implement complement policies.The financial markets need to develop the bond market, on the other hand, to obtaindirect financing channels for large enterprises, so that SMEs can obtain more financingfrom the bank. Banks need to redefine their market position, establish a scientificinterest rate pricing mechanism, strengthen differentiated services, focus on thecollection of soft information, innovation management, optimize incentive andrestraint mechanisms. SMEs need to strengthen their financial management, clarifytheir own financial situation, improve the efficiency of circulating funds, and make fulluse of the innovative financing instruments such as bills financing.Improving SME financing system is a complex system, combined with China’sunique management system. Based on the interest rate market-oriented reform, themarket-oriented interest rate reform requires all parties to put forward new ideas forthis change. The feasibility and the specific operation we mentioned in our papershould be carefully checked and gradually improved in the next step of reform.