Research On Trade Financing Of SME For Bank Of China WF Branch

As is well known,the quantity of SMEs is huge in China,which have important social value.However,it is a common phenomenon that SMEs have difficulty in financing for a long time.During the process of the trade,one individual subject trade finance appears.It has one important precondition that the trade background should be real,and another characteristic is self-liquidating which means the first source of repayment comes from the trade itself.In reality,SMEs have a strong demand for financing due to the time lag between capital flow and goods flow in the process of trade.Based on the self-liquidating character,trade finance has lower risk compared with other financing products.Therefore,trade finance means lower financing costs as well as lower difficulty for SMEs to obtain the finance.In reality,it means a lot to solve the problem of SMEs' difficulty on financing.On one side,to help the SMEs decrease the financing costs also contributes to a lower product costs,which further increases the competitiveness of SMEs.On the other side,the commercial bank also gets benefits through operating the trade financing products,since it has lower risk than other products.The commercial banks can make full use of its own fixed assets and goodwill to operate this trade financing products.Meanwhile,it contributes to increase the operate inefficiency and decrease the commercial banks' leverage to the positive matter.Besides,to help to solve the social problem of SMEs financing is the responsibility of the commercial banks,which shows the positive social responsibility of the commercial banks,and the public would also willing to see this positive contributions to social development.Overall,the commercial bank should plan as earlier as possible,change the management strategy from extensive management to intensive management,form a training program to cultivate more professional talents,conduct innovation to examine the background and achieve batch processing to solve the SMEs financing problem.Finally,the small and medium sized enterprises and commercial banks will achieve a win-win situation.