Study On Small Business’s Relationship Lending Under Information Asymmetry

Small business, a significant component of China’s market economy, is undoubtedly a significant force to pull the economic growth of our country. With the deep development of the economy, the function of small businesses in our country becomes more and more prominent. They play unique roles in aspects like forming patents, creating job opportunities, accelerating technological reformation and improving market efficiency, etc. Therefore, the development of small business is closely concerned by all sectors of society. Up to the end of2014, small businesses have contributed over60percent to the GDP. They occupied over90percent of actual enterprises, solved nearly80percent of employment problems, created67percent of patents and74percent of technological innovation. However, discrepant to the contribution, their financing resources are less than a quarter. The financing difficulty of small business is still quite severe.Aiming at this ubiquitous international problem, domestic and overseas scholars had active and extensive exploration, and then relationship lending emerged. Researchers studied on the features of relationship lending, relationship lending and information production, the definition of relationship lending, etc., and formed plenty of achievements with referential meaning. This paper combines correlation theories of information economics on basis of existing studies and centers on information production to have a further discussion on the strategies of relationship lending under the situation of information asymmetry.The results display that reputation plays a significant role in the process of passing relationship signals. When expecting the management level of an enterprise, the bank needs to accurately analyze the incidental information sending by the enterprise. To prove the information production in relationship lending can reduce information asymmetry, so that the bank can make accurate lending decisions, which improves the possibility to achieve the loan for small businesses. Finally, on basis of research results and referring to international experiences, the paper puts forwards countermeasures and suggestions to the benefit of carrying out relationship financing, expecting to have some guiding significances in making up the funding gap of small businesses in our country.