The Research About The Relationship Between Small Bank And Small Firm Finance

Up to2012,the number of medium-sized and small enterprises is about eightymillion,which is about ninty-nine point eight percentage of all.The GDP thatmedium-sized and small enterprises produce is more than sixty percentage of all.Theirrate of contribution to tax is more than fifty percentage.They offers more thanseventy-five percentage urban employment. But the problem of financing has puzzledthem all the time,which hinders their development most.Meanwhile, chinese bankingindustry compete insufficiently,small and medium-sized banks don’t developenough,which may be correlated with the puzzlement about financing.Firstly,I make a theoretical analysis to the loan of medium-sized and smallenterprises,which find that small and medium-sized banks have information costadvantage and angency cost advantage and trade cost advantage in comparison withbig banks.Secondly,I use the analysis way of SWOT,which find that small andmedium-sized banks wish and be able to loan to medium-sized and small enterprises.I make an empirical analysis on medium-sized and small enterprises,which find thatthe higher market shares the small and medium-sized banks have,the more loans themedium-sized and small enterprises acquire,especially the long-term loans.theconsequence is that it reduses the disparity between small and medium-sized banksand big banks.In my opinion,the development of small and medium-sized banks has a close relationwith medium-sized and small enterprises financing, the higher market shares the smalland medium-sized banks have,the more loans the medium-sized and small enterprisesacquire,so,I propose that chinese government relax the admittance restrictions ofbanking industry,give an opportunity to the private capital to develop in it,and inspiresthe development of local banks and complete finacial laws which guarantee faircompetition of banking industry,finally,the puzzlement of medium-sized and smallenterprises financing would be solved well.