A Research For Building Financial Supporting System Of Small And Micro Enterprises In Hainan Province

Small and micro enterprises are important for economic development, social stability and technology innovation in each economy. While Chinese economic market keeps reforming, small and micro enterprises with flexible management meet the demand timely and promote economic growth in a stable way, creating60%of gross domestic product. Meanwhile, as the main private enterprises, small and micro enterprises absorb more than70%of China’s new and re-employment of the population. In addition, small and micro enterprises with strong entrepreneurial spirit create more than60percent of invention. In the regions, the role of small and micro enterprises is also increasingly prominent. In Hainan Province, small and micro enterprises absorb90%of total employment in enterprises, paying a tax accounting for over60%of public revenue, and as the basis of industry the Industrial Parks provide a base for technological innovation. Therefore, the promotion of small and micro enterprises development is of great significance for Hainan Province to develop economy, increase tax revenue, protect employment and improve the technological innovation capability to complete the transformation and upgrading.As the saying,"Big business develops through culture, medium-sized enterprises by management, and small business develops through funding." Therefore, the key to the development of small and micro enterprises is adequate funding. And protecting funding for small and micro enterprises means not only adequate funding, but also a comprehensive system of financial support, so as to ensure that the funds can flow smoothly into small and micro enterprises. It is worth noting that even China’s current financial system could meet the financing needs of large enterprises, it will not meet the financing requirements of small and micro enterprises. China’s current financial system in which large state-owned Banks act as the main body, is not only limiting small and micro enterprises by its own management ability, but also by the large bank credit discrimination. Big banks under the limitations choose to discriminate small and micro enterprises when making a loan, which is a kind of rational choice, often aims at meeting the requirements of normal capital security. Meanwhile, making up the high cost due to the complex organizational structure is another requirement to the discrimination. To solve these problems, it is necessary to establish a diversified financial support system suitable for small micro enterprise.This article aims to fund small and micro enterprises by matching supply and demand issues and make policy recommendations to build a diversified financial support system. In this paper, small and micro enterprises financing theories are listed at first, and then through the qualitative analysis and quantitative analysis, the status of small and micro enterprises financing system in Hainan Province is studied. It is concluded that the difficulties in financing of small and micro enterprises in Hainan Province, is mainly due to the single financing approach, such as the lack of small financial institutions. Finally, one conclusion based on the analysis presents innovative financing products and services for small and micro enterprise is needed. It is also suggested that the credit system of the small and micro enterprises should be enlarged. Another suggestion is to establish the direct financing platform for small and micro enterprises. Promoting the development of small and medium financial institutions as well as improving the financing environment for small and micro enterprises is also advised.