Research On The Legal Problem Of Small And Micro Enterprises Financing In China

Small and micro enterprises play an important role in China’s economic development. However, the lack of financial support has always been an important reason for the obstacle of rapid development of small and micro enterprises in China. The active development of Chinese small and micro enterprises can be promoted by solving the financing difficulties. Small and micro enterprises financing refer to economic activities aimed at obtaining funds from investors and creditors carried out by enterprises through certain channels so as to meet the needs of their own survival and development. At present, China’s small and micro enterprises still face various difficulties in financing problems, among which narrow financing channels and high financing costs are the most prominent.In recent years, with the increasing emphasis on small and micro enterprises in China, the State Council, Banking Regulatory Commission and other departments as well as local governments at all levels have issued a series of laws and regulations so as to ease the financing problems of small and micro enterprises. For example, the State Council issued Opinions on the Healthy Development of Small and Micro Enterprises in 2014, Banking Regulatory Commission issued Opinions on Deepening the Financial Services of Small and Micro Enterprises in March, 2013, and Henan Provincial People’s Government issued Opinions on Supporting the Development of Small and Micro Enterprises in 2015. However, due to the low level of legal effect of these documents, their legal forces are limited, and most of them can’t be completely implemented. As the first specialized law to support and promote the development of small and medium sized enterprises in China, the Law of Promoting Small and Medium-sized Enterprises has lagged behind the current development of small and micro enterprises. Furthermore, the relevant financial legal system in China provides limited financing support to small and micro enterprises. Security plays an important role in financing of small and micro enterprises. However, the current security industry in China is still in the development stage. Financing guarantee system of small and micro enterprises is not perfect, and lack of laws and regulations leads to the deficient prevention and control of risk. Although informal financial market has a natural advantage in financing process of small and micro enterprises, the informal financial market in China is still lack of effective and systematic regulation. In 2015, the Supreme People’s Court issued Provisions on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases, which reflects the navigation service function of judicial organs to resolve disputes in private lending and the financing difficulties. Nonetheless, at present, China still needs to regulate the informal finance from the aspect of legislation.The United States, Japan and Taiwan region of China have attached great importance to legislation on small and medium enterprises, and their financing legal systems are relatively perfect. Therefore, China can learn from their legislative experience to improve the legal effect of small and micro enterprises financing and revise the Law of Promoting Small and Medium-sized Enterprises, based on which small and micro enterprises financing legal system in China could be further constructed. In addition, specific small and micro enterprise financing guarantee law should be enacted to construct multi-level small and micro enterprise financing guarantee system. Finally, relevant legal system of informal finance must be perfected to strengthen the supervision of informal finance in China, which will create a convenient and secure financing environment for small and micro enterprises.