The Financing Problem Of SME In Chengdu Under The Condition Of Credit Crunch

With the deepening of reform and opening up, in China SMEs have become gradually highlighted in the development of the national economy. Of all the enterprises in China,99%of them are SMEs. According to the statistics of the Ministry of Industry, SMEs provide up to80%employment all over China, the value SMEs created is more than60%of the GDP, the tax revenue from all those SMEs is about50%of the entire tax in China, we can say, SMEs play an extremely important role in increasing revenue, being committed to the prosperity of the economy, increasing employment opportunities and optimizing the economic structure.However, with the outbreak of the financial crisis and the changes of the complex domestic and international economic situation, the problems SMEs faced are gradually exposed. Mismanagement, uncultivated business owners, facing multiple regulations in trading and the rising of the costs of raw material and labor, the most prominent problem to SMEs now is financing.In China we have variety of SMEs in total a huge amount, therefore, we choose the footwear SMEs of western region as the research object. By field investigating footwear SMEs in Chengdu, accompanied by checking books, periodicals and Internet information, we use Internal environmental analysis and the PEST external environment analysis, explore the cause of the difficulties that footwear SMEs in Chengdu faced in financing from a business point of view, and point out that enterprises have to work hard on self-improvement in internal management, business strategy, market positioning, establishing core competitiveness, as far as possible to achieve intangible financing threshold that various financial institutions set for Chengdu footwear SMEs.On the other hand, through the research in representative bank, non-bank financial institutions in Chengdu, in-depth explore bank credit policy in different scale for the financing of Chengdu footwear SMEs. Due to the occlusion of bank financing channels, those footwear SMEs will have to reach the small loan company for help, even those private lending company without legal protection. Therefore, financial institutions need to change their thinking; put aside the financial statements and other rigid targets, in-depth understand of the actual operating conditions to break the situation of unequal information, while increasing the tolerance rate of non-performing loans and introducing new financial products, in order to create better financing conditions for the footwear SMEs in Chengdu.This article is also Investigated the policy of the government of financing, Both Chengdu municipal government and Wuhou district government unveiled policies to support SMEs, and even policies for the development of Chengdu shoe industry cluster. However, due to lack of considerations about the enforcement, some supportive policies become just a mere scrap of paper. Government have to work out enforceable policies to really provide support to the footwear SMEs in Chengdu, play the role as a bridge between the SMEs and financial institutions, and share some of the credit risk in the financing process.Contribution of this article is mainly in the following two aspects:First, this article is more comprehensively explained the reasons for the difficulties of financing of SMEs in different financing channels, elaborate from not only the bank, but also from private financing, this provides reference information for SMEs of the same industry; Second, the article focuses on the new financing instruments, as well as innovative financial products launched by various financial institutions, this also can be a useful reference for the footwear SMEs in Chengdu about the non-traditional financing methods.