Financing SMEs In Inner Mongolia

Small and medium size enterprises play an important role to our country’s economic development, it is a indispensable part of the national economy in our country, directly affects the quantity and quality of GDP. Financing difficulty is a universal problem and an important restrictive factor in the development of SMEs. In recent years, China has developed a series of policies and regulations successively. Meantime, financial institutions have also carried on corresponding reform for SMEs financing. External environment for the development of SMEs has improved significantly. Small and medium-sized banks are playing an increasingly significant part in Chinese banking system, and the orientation of their strategic development determines the direction and quality of development. Small and medium size banks should develop the finance for small businesses, which is of great significance for banks to realize strategic development.This is what the paper discusses, by combining the strategic development of small and medium-sized banks and SMEs financing problems.Recently, following credit management system reform and capital operation system reform of the state-owned commercial bank, the authority of lending loans is taken back level by level, fund is allocated nationwide. Because of many management levels and long decision-making chain, there is inevitable and even more serious asymmetry in the grasp of small business information. Taking lending authority back increases the information asymmetry. Therefore, Corporate rating standardizes day by day, and loan approval is becoming more and more strict. Small and medium-sized commercial banks should develop credit business to the relatively specialized direction and play near and personal service feature.Firstly, the authority should encourage strong small and medium-sized commercial banks to set up branches in county level. This can make up credit funds shortage of county economy after the quit of state-owned commercial bank. Actively guide the rural credit cooperatives which have excessive capital to strengthen the credit support of township enterprises. Secondly, build a multiple-level guarantee system for small enterprises credit. Expand the guarantee fund by multiple channels, enhance guarantee coverage, simplify operation procedure, reduce guarantee service charge and the tax burden of guarantee agencies, boost the source of risk compensation, consummate risk sharing, risk prevention and risk addressing system of the credit guarantee agencies, commercial banks and reassurance agencies. Local governments can attempt to take a share in private guarantee company, play the role of financial leverage and drive a large number of private capital into the guarantee market. Thirdly local governments should play their role. They could set up small business development fund, subsidize small credit guarantee, provide information consultation and personnel training. Encourage professional collaboration inter enterprises to develop together, and promote industrial progress.