Discussion SME Financing Problems On The Basis Of Financial Repression And Monopoly

SME is an important part of our national economy; it makes a significant contribution toour country’s economic growth. It not only increases the GDP and tax revenues, but alsoprovides a lot of jobs, promotes employment, enriches people’s lives and promotes socialstability. SME plays an indispensable role in the growth of the national economy. However,the contribution that SME makes to economy doesn’t match to financing resources that SMEobtains. In recent years, the problem of SME financing is particularly prominent. There are somany reasons cause SME financing problem, there are reasons for their own, there are reasonsfor banks, there are also reasons for single way to finance. This paper studies the reason whySME financing is so difficult on the basis of financial repression and financial monopolytheoretically and practically. By doing empirical research and analysis of financial data, itstudies how financial monopoly and financial repression make effect on the behavior of SMEfinancing; in the end it makes a conclusion that measures to ease the difficulty of SMEfinancing.This paper is divided into six chapters.The first chapter is an introduction. It explains the background and significance ofwriting the article, and it summarizes the current research and points out the research ideasand innovations of the paper.The second parts are the second, the third, the fourth and the fifth chapter.The second chapter is the theoretical basis. It describes mainly about financial repression,financial monopoly and non-formal finance theory. In terms of financial repression, itdescribes the definition and forms of financial repression. In terms of financial monopoly，itexplains the formation of monopoly and the character of financial monopoly. In thenon-formal financial, it explains the concept and the formation of non-formal financialsystem.The third chapter is researching why SME financing so difficult based on SME financingrepression. This paper describes the forms of financial repression, such as more financialregulation, the difference among enterprises on financing, the imperfect system of financingand the active non-formal financial. It also explains how financial repression influence SME financing.The fourth chapter is researching why SME financing so difficult based on SMEfinancing monopoly. First of all, due to some reasons, the large banks do not target at smalland medium enterprise loans, so SME financing is difficult to obtain from large banks.Secondly，although small banks have advantage over SME financing, they have not been fullydeveloped.The fifth chapter is empirical analysis. It uses indicators of financial repression andfinancial monopoly as independent variables, and uses indicator of SME financing asdependent variable. It studies the relationship between the independent variables and thedependent variable, and concludes that whether financial repression and financial monopolygenerate influence on SME financing.The third part is the sixth chapter.The sixth chapter is suggestions. It proposes the measures to improve SME financingfrom the national level, the financial industry level and the enterprise level. It suggests that weestablish a new financing concept, standard non-formal financial, establish small andmedium-sized financial institutions of various levels, and perfect guarantee and re-guaranteemechanism.