Research On Bank Loan Of Small And Medium Enterprises

Since the1990s, China’s theorists and decision-makers have increasingly valuedthe role of middle and small-sized enterprises (SMEs) in China’s economic reformand development. SMEs bring China’s labor cost advantage into full play, increaseemployment opportunities, and encourage innovations which are irreplaceable.External financing difficulty is an important conditioned factor for the furtherdevelopment of China’s SMEs. That is to say, the development of SMEs is restrictedto a narrow range of self-financing in a large part, therefore, the potential and speedwill also be limited. In China, credit financing is a vital aspect of SME financing oreven the only external financing mode which has substantial impact on SMEs. Theyear of2013can be described as the most competitive year on Chinese bank credit toSMEs, major commercial banks launched credit products to SMEs, and SME credit isalready becoming new capital profit field. Consequently, research on SME creditfinancing issues is meaningful in theory and policy.On the basis of introducing the basic concepts of the credit contract theory, thisthesis analyzes adverse effects of various factors on SME credit contract design. OnMarch12,2014, China Banking Regulatory Commission (CBRC) approved theestablishment of five private banks which officially witnessed the beginning of a newround of financial reform. The government approved the establishment of privatebanks in the hope of activating SME credit, banking reform and innovation. Financialsupport for SMEs by the government and bank cannot be done at one go and onlyreasonable support and sound market mechanism can help SMEs grow in a healthyway, which leads a sound and rapid national economic growth.This paper is divided into five parts: The first chapter is an introduction, whichdescribes the background and significance, literature reviews, innovations anddeficiencies, etc. The second chapter discusses the issue of the SME financing gapand SME credit financing in the framework of SME financing structure. Based on thecredit contract design theory, the third chapter analyses the adverse effects of bankingmonopoly and interest rate restriction on SME credit contract design. The fourth chapter analyzes the current business model of SME credit, and focuses on theempirical research of SME credit services provided by commercial banks in differentscale and structure. The fifth chapter is the foothold of this thesis and combines withthe practice of SME bank credit financing to put forward policy recommendations forimproving SME credit financing.