Financing Difficulties Of Small And Micro Enterprises And Countermeasure Studies

Small and micro enterprises are important forces for the economic and social development, and they play an irreplaceable role in promoting economic growth, increasing employment rate, technological innovation, social harmony and stability and many other aspects. Promoting the sound and fast development of small and micro enterprises is an important basis to maintain stable and healthy development of the national economy and it is a major strategic task concerning the people’s livelihood and social stability. The feature of small micro enterprise, the financial crisis, economic system and a variety of factors cause the financing difficulty of small and micro enterprises in our country. Therefore, financing difficulties have become a survival and development bottleneck of small and micro enterprises, seriously restricting and hindering the further development of small and micro enterprises. Financing difficulties of small and micro enterprise have become a common concern of people from all walks of life in China.This paper begins with the analysis of the factors of small and micro enterprises:Because the growth of small and micro enterprises is in the poor-credit social environment, small and micro enterprises do not have a correct understanding of establishing good credit relationship, while the financing market is mainly built on the credit economy. Small and micro enterprises lack the idea of establishing the credit relations. They fail to repay bank loans and other credit businesses on time, small and micro enterprises are private and individual in nature, in the course of operations, the centralized leadership, family management phenomenon is severe, there is not a scientific management method, causing certain impact and difficulties for finance; In the early stage of small and micro enterprises, the financial system is not sound, they do not have financial statements confirmed by intermediary auditing, and the financial condition lacks transparency. Small and micro enterprises have the following problems:less fixed assets, rapid changes in current assets, the difficulty in quantitying intangible assets, lack of mortgage rates of plant and equipment and others. Especially in the absence of a perfect guarantee system, due to the defects of small micro enterprises, it is hard to find right guarantee agencies or the guarantors, causing the increasing difficulties of small and micro enterprises in bank loans, even if they are finally successful credited, in the process of lending link, the lack of enough guarantees and the mortgage leads to the failure of loan, which is quite common, leading to financing difficulties of small and micro enterprises.Next, the paper conducts the analysis from the financial institution level: China has formed the coexistence of financial system oriented by state-owned commercial banks, policy-oriented financial institutions, joint-stock commercial banks, other non-bank financial institutions. This unique financial structure is very unfavorable for the financing of small and micro enterprises, causing an imbalance of credit resources, and the commercial bank credit funds favor medium-sized enterprises. The product operated by small and micro enterprises is not the same, the operation is more active, the size of management is various, and the demand differentiation is high. At present, the mainstream of financial products is more from mid-sized enterprises, financial services which can be promoted by small and micro enterprises are quite scarce with a single type of product. The single financing way and the lack of financing channels are the main causes of financing difficulties for small and micro enterprises. Between financial institutions and small and micro enterprises, there are asymmetric information and other factors, which causes financing difficulties for small and micro enterprises.Then, this paper analyzes the factors from the government level:in recent years, although our country has issued some credit policies which require them to be favorable to the small and micro enterprises, there is not a set of complete financial policy system to support the development of small and micro enterprises, credit funds and most of the social resources mainly flood to large enterprises, limiting and influencing the small and micro enterprises in financing and resources. Due to the initial stage of credit system construction in our country, the credit system of many small and medium-sized enterprises has not established, imperfect credit system, poor personal credit consciousness lead to the ongoing credit crisis. Although the Chinese government put more emphasis on small and micro enterprises, the policy support in place is not enough. Insufficient, vague and ineffective implementation and other exogenous factors cause financing difficulties of small and micro enterprises.This paper also analyzes the support and help in the financing activities of small micro enterprise in Germany, the United States and South Korea, as well as the results and experience, which are used as a reference. And this paper puts forward solution for the financing difficulties of small and micro enterprises in China:first, small and micro enterprises should strengthen their own credit construction, establish a good corporate image. Small and micro enterprises must base on long-term development of enterprises, strengthen enterprise credit management, improve enterprise credit, and enhance the quality of enterprise credit. Only in this way can small and micro enterprises establish good corporate financing credit, opening up a good enterprise financing channel. The strength of enterprise financial management can ensure the true accounting information. Small and micro enterprises should improve the level of financial management, strengthen financial control measures, and strengthen the technical innovation and structural adjustment of small and micro enterprises; Second, government should strengthen support, establish the policy risk compensation to achieve risk-sharing or compensation through the institutional arrangements, the risk compensation should place extra emphasis on the support of small and micro enterprises before the loan, the risk compensation should place extra emphasis on the compensation of commercial bank loan losses after the loan. And government should implement the preferential tax policy on full business tax and income tax relief for some special small and micro enterprises, reduce the business tax and income tax according to certain proportion, and raise tax threshold of small and micro enterprises and other preferential tax policies. Government should implement differentiation regulatory policy and monetary policy, further strengthen differentiation regulation, and support commercial banks to further improve the financial services for small and micro enterprise; Third, the financial institution’s countermeasures are the most important, the banks should set up a professional operating system and incentive mechanism for small and micro enterprises. And the banks should set up fine and specialized management agencies, develop professional management team and develop unique incentives for the small and micro finance. Second, the segmentation of small and micro enterprises’ customers, the segmentation of the size of small and micro enterprises, the industry segmentation of small and micro enterprises, the life cycle segmentation of small and micro enterprises, so as to improve financing products. Then, the banks can provide financial services with the invoices and bank statements financing products according to the financing needs in the procurement aspects for the small and micro enterprises. And conduct a series of financial services according to the production cycle of small and micro enterprises, market characteristics and capital requirements, different periods of cash flow, payment frequency. And the banks should expand the range of collaterals based on small and micro enterprises’ mortgage, collateral and guarantee, try new and flexible guarantee approaches, promote the industrial chain financing and other financial services. Banks should also reasonably determine the term of the loan and the way of repayment according to the situation of small and micro enterprises, to ensure the normal operation need of small and micro enterprise funds.In summary, only with the joint efforts of small and micro enterprises, financial institutions, government departments and all sectors of society, can the financing difficulties of small and micro enterprises be resolved gradually.Finally, on the basis of the analysis of the current financing situation of small and micro enterprises in Guizhou Province, by combining the practice of specific circumstances of Bank A in Guizhou Province, commissioning the specialized management agencies, small and micro enterprises which meet the credit conditions of Bank A are organized to set up joint fund of small and micro enterprises. In the context of compliance with the relevant state laws and regulations and the relevant credit management system of Bank A, it is needed to provide loans for small and micro enterprises within the organization members of the unit, to enrich and expand the credit business products of small and micro enterprises. And the paper made research on the problems which can meet the financing difficulties of small and micro enterprises, so as to explore a new way of solving the financing difficulties of small and micro enterprises.