Research On Design Of The Loan Contract For Small And Medium Enterprises Based On LRP System

With the constant development of the economy in our country, SME not only accounts for absolute advantage in number, but plays an irreplaceable role in expanding employment and improving the people’s life. But financial support that SME obtains does not match with the contributions that does to society. Which leads to it is a universal problem for small and medium enterprises to conduct financing.Emergence of group lending can alleviate the financing difficulties of SME in some degree, But the feasibility and instantaneity of Social Restraint mechanism and Peer Monitoring mechanism has been challenged by the reality, coupled with special economic environment of China, which make group lending has blocked on development in China. In order to promote the development of group lending in China further, it is necessary to explore new ways of implementing group lending in China.Loyalty rewards program (LRP) system,which is a system that offers consumers certain incentives with the expectation that these incentives will serve as a motivation for customers to continue buying the products or services.and the biggest advantage of the system is that it can track the join enterprises from time to time within it according to customer information of the database. What’s more, it can cancel the qualification of member or enterprises at any time.Seeing that the above advantages of LRP system, combined with the deficiencies of group lending mechanisms, we integrate SMEs into the LRP system, and enterprises will be divides into,next, we conduct on research on the contract of group loan on SME based on LRP system.This paper mainly through the principal-agent model, which involves host SME, join SME and a bank. Studying the contract of group loan on SME based on LRP system respectively. The results show that the form of lending depends on relationship between the minimum investment, the collateral endowments and willingness to repay of the two agents.what’s more, Symmetric group loans are constrained efficient when power relations between individuals are relatively equal.When power relations are relatively unequal, cosigned loans are efficient.