The Study On Informal Financing Modes Of Medium-sized And Small Enterprises In Wenzhou

The social economy of our country develops rapidly after the reform and opening up. Medium-sized and small enterprises gradually become the main force in the development of social production. However, financing difficulties has become the first major obstacle for the medium-sized and small enterprises and restricted the development of them. Because of the information asymmetry between capital supplier and demander, medium-sized and small enterprises can hardly obtain the financial support from the formal financial institutions. Informal financing is flexible, convenient and efficient, it can solve the financial problem of medium-sized and small enterprises. But the inherent defects of ulnerability, not normative, high interest rates in the informal financing modes make it easily to trigger financing risks and lead to credit crisis. The mature informal financing modes of medium-sized and small enterprises in Wenzhou has been a series of typical modes in China. However, in the year of2011,the credit crises in Wenzhou highlighted the defects of informal finance. We have to re-examine the problems of informal financing modes in Wenzhou. After that we should analyze the causes and sum up the experience and lessons. This paper makes a deep research on the informal financing modes of medium-sized enterprises in Wenzhou area and expounds the characteristics of informal financing modes in and out of the system. Then this paper selects a typical medium-sized enterprise of Wenzhou--Xintai group as an example of case and analyses the specific modes and problems of informal finance in Xintai group. Lastly, this paper puts forward measures for standardizing the informal financing modes of medium-sized and small enterprises. This article is divided into seven parts:The first part:introduction. It briefly describes the research background and significance, and then summarizes the research mentality, the framework of this paper, the research method. Finally it expounds the contributions and shortcomings of this paper. The second part:literature review. This part firstly elaborates theories and literature about the finance and informal finance of medium-sized and small enterprises at home and abroad, and then comments the relevant research results. Finally it points out defects of existing theories and literature.The third part:analysis of the theories about informal finance of medium-sized and small enterprises. It firstly defines medium-sized and small enterprises, summarizing the domestic and foreign current classification criteria. Then it expounds the organizational and operating characteristics of medium-sized and small enterprises. Finally, it defines informal finance and makes a comparative study about the characteristics of formal finance and informal finance.The fourth part:research on informal financing modes and problems of medium-sized and small enterprises in Wenzhou. It firstly summarizes the present informal financing situation of medium-sized and small enterprises in Wenzhou. Then it divides informal financing modes of medium-sized and small enterprises in Wenzhou into inner and outer system modes and discusses them. Then it researches the informal financing problems of medium-sized and small enterprises in Wenzhou. Finally, it study the status and causes of the high cost, high risk and corrupt practices of informal financing modes.The fifth part:case analysis. This part selects a typical medium-sized enterprise of Wenzhou--Xintai group as an example of case. Firstly, it introduces the background of informal finance in Xintai group. Then it expounds the informal financing modes of Xintai group. It analyzes the informal financing problems of irrationality finance, excessive capital operation and so on. Finally, it summarizes the case and the enlightenment of the case.The sixth part:the research proposal. Based on the theoretical analysis and case studies, respectively, this part puts forward suggestions of standardizing the informal financing modes of medium-sized and small enterprises.The seventh part:conclusion. This part summarizes the conclusions of this article from two aspects:the informal financing modes of medium-sized and small enterprises need to be further standardized. Medium-sized and small enterprises shall rationally treat the informal financing modes.The main contributions of this paper:Firstly, the former theories and literature about informal finance of medium-sized and small enterprises mostly researched the importance and feasibility of informal finance, this paper focus on the informal financing modes of medium-sized and small enterprises, the study of this paper is more specific. Secondly, after the Wenzhou credit crises in2011,the academia lacks in-depth analysis about the case of Wenzhou informal financing modes,however, this paper focus on a typical medium-sized enterprise in Wenzhou and researches its informal financing modes and problems, this paper has an important realistic significance. Thirdly, based on the theoretical research and case study, this paper puts forward a series of suggestions according to the informal financing modes of medium-sized and small enterprises in Wenzhou, the suggestions are operable.