SMEs Financing Problems Research

With the deepening of reform and opening up process, China’s SMEs ushered in theopportunity for self-development.The team has been enriched and the position in the nationaleconomy has been increasingly prominent. China’s SMEs play a very important role in manyaspects. For instance, China’s SMEs promote the sustainable development of the nationaleconomy; inject fresh vitality to the market; ensure that the economy running smoothly andraise the employment rate. The increasingly prosperous market supplies a stage for the SMEsto fully display themselves. But in order to survive and develop in such a competitive market,there are still many challenges to face, first is the financing problem.In order to solve the financing problem of SMEs, it is necessary to start from financingmethods. For the current circumstances, although there are a wide variety of financingmethods in the market, SMEs are more likely to choose the bank credit financing under therole of the internal and external factors. Even so, it doesn’t mean that the road of bank creditfinancing for SMEs is unobstructed. As the time going on, it is not conducive to SMEs andalso makes a dilemma for banks and other financial institutions. In order to break thisembarrassing situation and make both sides to achieve a win-win situation, the two sidesshould make efforts to improve their own problems.This paper begins with the current situation of SMEs bank credit financing and thenanalyzes the factors leading to the difficulties through the financing gap. Here comes thereason. First, the management model and financial structure are difficult to meet the lendingrequirements of banks and other financial institutions; Second, the banks and the otherfinancial institutions have great responsibility on loans, meanwhile, the obsoleteorganizational structure and credit system, the conservative business philosophy as well as thesingle product also make SMEs bank credit financing become more and more difficult.Additionally, the Credit control and the Information asymmetry also set up obstacles to SMEsbank credit financing.Finally, it brings some suggestions that based on the research and analyses mentionedabove to relieve the difficulties of SMEs bank credit financing. The SMEs should beimproved according to their own problems. In addition, it has benefit to both SMEs and banksto create a favorable external environment. In order to create a favorable external environment,it should begin with the system. The paper said that we should speed up the construction ofcredit system for SMEs, improve SME credit guarantees system, improve the management system of commercial banks, take the successful experience from abroad for reference,establish the specialized government departments and policy-oriented financial institutions,develop specialized small and medium-sized banks and other financial institutions. The SMEswould turn away from the plight of credit financing gradually and solve the financingproblems someday if we took a multi-pronged approach.