Research On The SME Credit Financing Operations Of Commercial Banks Of Different Scales

SMEs are important part of the national economy, which can improve the employment rate and earn more foreign exchange. However, countless small business owners and policy makers have been plagued by financing problems of SMEs. SMEs, due to weak anti-risk ability, information opacity, lack of mortgage assets and other causes, are difficult to obtain necessary funds to develop from commercial banks, while commercial banks are main source of financing for SMEs. That is why there is a big long-term funding gap for SMEs in China. Usually scholars think that SMEs should get credit from small banks, large companies should obtain credit from large banks. But now some big banks also pay increasing emphasis on SME business. SMEs business are operated successfully by some large banks. This paper describes the current status of commercial banks’ lending to SMEs first. Then, we analyze differences between different-sized banks in lending to SMEs. After that, reasons for these differences are discussed through some theories. Through empirical testing, we compare the efficiency of different sized banks’ credit for SMEs. We found that small banks have higher efficiency of credit supporting for SMEs compared to large banks. But some of the big banks also show good performance on supporting SMEs by credit. Therefore, we believe that if large banks are guided with correct strategy, it can effectively support SMEs by credit. Big banks and small banks should work together and make proper strategies to serve SMEs better. Finally, this paper makes several recommendations on the basis of theory analysis and empirical analysis, hoping to provide some suggestions for SMEs business of China’s commercial banks.