Commercial Bank’s Size And SMEs Credit Financing

In recent years, there are great growths in the economic scale and developmental quality of China’s SMEs, which has become the most important force and the most active subject in economic development, and plays a pivotal role in activating economy, creating jobs, promoting innovation, increasing taxes, and benefiting the public. However, some worldwide problems(such as financing difficulties, shortage of personnel, etc.) which have hindered the development of SMEs for long times, are still unresolved fundamentally. In the profound change of economic development mode, as the rise of cost of raw material, land, labor and the grim situation of the transformation and upgrade accelerating, many problems are occured in most SMEs, such as the "closures","private owners run away" and other issues appeared, and it is the financing difficulty of SMEs that is the root cause of the current economic problems. Under the context of the financial crisis, commercial banks put the safety of the funds at the first place, at this time, the phenomenon of "credit crunch","credit rationing","malfunctioning of financial price" present again in commercial banks, which has intensified the financing difficulty of SMEs. In China, indirect financing is the main body of the country’s financing and the commercial banks occupy a quite higher proportion of credit, we can only choose a more realistic measure to resolve the financing difficulty of SMEs, which calls for large commercial banks lending to SMEs.The paper is divided into five chapters to discuss. First, starting from the basic theory, we sort out the theory of SMEs financing, which include:identify SMEs from the two aspects of international and domestic; find out the theoretical basis of commercial banks to supporting SMEs credit from the three theories of credit rationing, relationship lending and capital structure; and make a briefe introduction on SME’s financing mode. Then we analyze the credit financing situations of SMEs which include:internal financing limited; external financing blocked; commercial banks generally credit crunch; and the serious shortage of credit fund. At the same time, we use the mathematical method that based on the analytical framework of the SMEs breach to explore the mechanism of the SMEs credit financing difficulties, and then pointed out that the root causes of the SMEs financing difficulties include that, the funds gap between supply and demand, the financing preference of large commercial banks which limits SMEs to obtain credit support from commercial banks, and the SMEs themselves small scale, weak in strength, the low ability to resist risks of the SMEs themselves, and the tight situation of economic which makes the financing difficulties of SMEs further highlight. Moreover, we use DEA empirical method to analyze the efficiency of large commercial banks supporting SME’s credit, and the results show that large commercial banks are more efficient than small and medium-sized commercial banks, in SMEs credit financing. Last, we put forward the countermeasures to solve the financing difficulties of SMEs from the three perspective of large commercial banks, SMEs and goverment.