Research On The Meaning Of Private Placement Bonds In Broadening The Financing Channeis Of SMEs

Since the reform and opening up, small and medium enterprises in China have got rapid development, and they had been the most dynamic part of China’s economy. Today, our economy is in an important period of transition, no doubt, to stimulate the vitality of SMEs is very important to our economic development, employment, and economic restructuring.In the development process of SMEs, financing is the most important part undoubtedly. However, in the real economy, the majority of SMEs are generally facing financing problems. In the macroeconomic adjustment period, the living conditions of SMEs is especially worrying.In June 2012, Chinese high-yield bonds-SME private placement bonds boarded the stage of history, which is the landmark event in Chinese bond market, and also an important initiative for the financial market to support SMEs.SME private placement bond is designed to offer SMEs a tool for direct financing, it play a certain role in lower financing costs and increase the availability of financing. But in reality, some SMEs private placement bonds has gradually exposed some problems, including the low willingness of investors, the high cost in the issue, the imperfect market system and so on. Because of the problems, the private placement bond began show signs of decay after the rapid growth in 2013 and the first half of 2014. It still remains uncertain if the SME private placement bond could be sustainable, healthy and be useful in SME financing.Based on the analysis of SME financing and SME private placement bonds, we explore the meaning of private placement bonds in broadening the financing channels for SMEs. After all the analysis and foreign experience, we tried to make suggestions, so that the finance market can provide better services for SMEs.