Research On Small And Medium-Sized Enterprises Credit Financing Predicament

Since China started reform and opening up, middle and small enterprises (MSEs) were playing an increasingly important role and also making a larger contribution to the development of the macroeconomic. With the explosion of the financial crisis and increasing macroeconomic environmental difficulties of enterprises operation, more disadvantages bring a lot of troubles to the MSEs in which credit financial topic is the most critical problem among MSEs. In fact, the credit difficulties of MSEs and the problem of bank credit risk are the two-sides of a coin. The credit of MSEs is increasing the uncertainty of future revenue for bank, which is also a risk problem. Besides eliminating the information deviation between SMEs and banks by all means, in order to enhance the financial structure of SMEs, the bank’s characteristics should also be considered. This point can be recognized through levels of Chinese and Foreign MSEs credit difficulties (Chinese SMEs is more difficult for the financing), so Chinese credit risk problem needs to be further deliberated.Credit risk is mainly from three aspects for banks, operating risk, credit risk and compliance risk. There are some documents already studied the operating risk and credit risk, although it also mentioned the compliance risk mainly emphasizing MSEs owner’s hidden behaviors to bank, say, compliance risk problem. There is no research about the bank director’s or manager’s compliance risk behavior. Regarding the MSEs’ credit difficulties, this paper is aiming to study the behavior of commercial bank which is a state-owned enterprise with a specific characteristic, and applying the theory of consignment delegation to explain the reason why state-owned bank director is not motivated support MSEs. Their behavior is the problem of multi-tasks hardworking model and it is also a reason how MSEs’ credit financial have difficulties from other aspect. In specific word, when the effort cost of different tasks become independent to each other, there will be positive effect between the policy of government motivation to state-owned bank director upon different tasks and the marginal revenue which government gained from different tasks and different loan actual earning rate; negative effect with state-owned bank direction risk attitude, tasks effort marginal cost and tasks execution. This paper, based on this fact, is aiming to analyze the MSEs credit risk problem of state-owned bank and further distinguish credit risk in order to increase information transparency and credit procedures simplification of MSEs. Besides strengthening follow-up supervise, it needs further enhance market orientation, weaken the nationalization, introduce professional managers market, and change existing promotion policy of bank director. With above method, the bank could provide stronger support to MSEs credit and relieve the credit financial difficulties in order to make Chinese economic developed better and better.