Analysis of the reasons for small and medium enterprises financing difficulties and Suggestions4842.doc

Analysis of the reasons for small and medium enterprises financing difficulties and Suggestions        Abstract: In China, with the continuous development of the socialist market economy, small and medium enterprises driving China's economic growth has become an important part. As the financing structure for SMEs, government and many other factors, the presence, resulting in small and medium enterprises financing difficulties. The author of the financing difficulties of SMEs conducted a superficial analysis, put forward some countermeasures and suggestions, with a view to attract valuable comments.         Keywords: SMEs; financing; causes; countermeasures         In China, with the continuous development of the socialist market economy, small and medium enterprises driving China's economic growth has become an important part. To ease the employment pressure on society to play a particularly important role. However, the pursuit of economies of scale and the implementation of catch-up strategies for the development of SMEs in our country 'strong-bit vulnerable' embarrassing situation. Which generally small and medium enterprises financing difficulties faced by most people's criticism. It became a very prominent development of SMEs in contradiction seriously restricted the production and operation and growth.         I. Analysis of Small Business Financial Structure and Characteristics         (A) the status quo of corporate finance structure         According to the survey of the existing statistics on the informal economy, China's 81% of small and medium enterprises that 'liquidity can not meet the demand', while 60.5% believe that 'there is no long-term loans', 47% of small and medium enterprises in cut-off due to lack of funds . Specifically manifested in the following aspects: first, the SME financing mainly rely on traditional financing institutions, in particular bank funds, it is difficult through the issuance of stocks and bonds to obtain, financing channels rather narrow. People's Bank in August 2003 a survey of foreign sources of SME financing is 98.7% from bank loans; second, small and medium enterprises from bank loans is very difficult. According to statistics, only about 1.4% of the SMEs to obtain loans, the total size of only about 8% of total credit; third have access to lending rates mostly in the 5% 8%. Because it is the period of 6 to 12 months of short-term loans, loan costs are high, is not conducive to SME development, a long return period, earnings more projects. In 2007, the International Finance Corporation of China, Beijing, Chengdu, Shunde, and Wenzhou, 600 private enterprises in four regions conducted a survey of the financing structure, reflecting the status of the financing difficulties of SMEs in China.         (B) structural features of SME financing         Compared with the state-owned enterprises, private SME financing has the following two main characteristics: First, the total value of assets, fixed assets, the proportion is low (mainly by acquisition lease or hire-purchase business premises, equipment and other fixed assets) , financing is mainly used for working capital and repayment of trade debt; venture capital comes mainly from personal savings or family funds, very little through formal channels, access to bank credit and other financial support. Second, financial service, as a special commodity, in its rental or commission operations vulnerable to erosion, becoming so-called 'bad' and not returned, so the owner of funds or financial institutions generally take on the financial intermediation prudence principle, more stringent vetting procedures, which a priori determines the state-owned large enterprises than small and medium enterprises financing difficulties.         Second, small and medium enterprises financing difficulties Analysis         (A) factors, the enterprise itself         SME credit can be attributed to lower the following factors: First, SMEs, due to assets and production scale are relatively small, relatively poor profitability, and thus anti-risk ability is poor, and thus the ability to repay the loan easily be reduced; two of SMEs business premises and staff with strong liquidity, legal representative of changes in frequency, resulting in non-reimbursable loans for SMEs 'moral hazard cost of' low; 3 is in addition developed in recent years a small number of high-tech enterprises, the majority of the quality of SME managers poor, the lack of proficiency relevant expertise, not only can not effectively manage the enterprises, but also relatively weak sense of credit, allowing businesses avoiding the debt, waste debt is widespread, even by 'two accounts' means to deceive the bank, resulting in loss of credit assets; Fourth, a simple organizational relationships for SMEs, the lack of guarantees may be provided a higher level authorities and industry organizations, and its own assets, is small, most of the obsolete fixed assets, low liquidity, resulting in applications for new loans, a serious shortage of collateral, guarantees the responsibility of hard implementation; 5 enterprise integrity and believed to be in necessity. After the occurrence of the credit risk the bank has no effective means to recover the loan and methods, eager to recover the loan, or even an unreasonable means of collection is based on loans, the result is the enterprise may be directly bankruptcy.         (C) The Government's efforts to asymmetric         (1) flawed system of financing services, corporate access to credit by low efficiency. China's current provision of services for the SME financing intermediary organizations many enterprises such as to obtain a loan, generally to pass a state-owned assets, mortgage assets, the housing management departments to assess, through the notary department of the loans identified, and to handle the insurance procedures, and some security sector but also through strict security measures and anti-mortgages, mortgage registration, evaluation process is extremely complicated, too many links, extending the loan to obtain time; the same time, a variety of registration and assessment of the high cost of conspicuous problems; In addition, in the present The system, generally the duration of mortgage registration for one year, while the mortgage loan term if more than one year (in particular, the project loan), companies must conduct an annual assessment of the registration procedure, not only increases the burden on the enterprises, but also to enable banks and enterprises are inconvenience.         (2) The Government House on the state-owned SME support go far enough. The state-owned capital for SMEs in particular, the reason why liquidity shortage, a main reason is that the government collected taxes from the enterprise more than the capital allocated too little liquidity needs of enterprises can only be resolved through a bank; In addition, the state has long passed 'Bo Gaidai' approach to increase investment in enterprises have also increased the debt burden of enterprises.         (3) The local financial capital and bank credit funds of funds did not play together, capital operating efficiency is low. For local SMEs, enterprises, by its state-owned SMEs, their sources of external funding not only bank credit funds, there is also a part of the project funds to support the financial sector, but due to fiscal and financial sector, less communication and contact, the lack of an effective co-ordination mechanism, two funds were not playing its due force.         Third, solve the financing difficulties of SMEs Suggestions         (A) the building of small and medium enterprises should pay attention to their own credit         SMEs in building their own credit whether an enterprise will repay the debt, or debt financing, the capacity of high or low, and whether willingness to allocate their initial investors should be entitled to interest or commitment. SMEs should be substantial compliance with financial and accounting transparency, take concrete actions to demonstrate their own credit, and try to get the real credit rating system or agency the authority of the recognition and appreciation of peers, discourage investors, credit worries, to eliminate financing for SMEs Finally the 'bottleneck'. The enterprise itself, it should wipe out enterprises 'integration contract' on the obstacles to development, efforts to increase the operational standards, to avoid, and make good use of risks to seek sustainable development of enterprises to attract investors, open up or expanding financing channels.         (B) strengthening the financial and credit support to SMEs. Should encourage commercial banks to adjust their credit structure, increase credit support to SMEs; to encourage commercial banks to participate in lending rates and market-oriented reforms; to allow state-owned commercial banks to finance small business loan interest rates based on supply and demand situation to float freely. Adjust the credit policy, modify the corporate credit rating standards, break the enterprise scale and nature of the conditions to support or not support the funding needs of SMEs and reasonable to follow a fair, notarization and principle of good faith and gradually raise the proportion of investment in lending to SMEs. Commercial banks in the organizational system should be innovative, a time when commercial banks have SME credit department head office has been set up outside a bank and two banks have also set up SME credit institutions, to develop and implement strategy for financial services for SMEs in this region . Reposted elsewhere in the paper for free download http:/         (C) the expansion of small and medium enterprises and channels of financing. At present the United States, Japan and other developed countries, an important source of financing for SMEs is one of a variety of asset-secured non-bank financial institutions (such as securities companies, insurance companies, various investment companies, the IMF and the Group's finance companies of large companies ) financing, SMEs can be non-productive assets as collateral to obtain loans from these institutions, with greater flexibility and adaptability. The same can be great efforts to cultivate China's non-bank financial institutions, will improve the financial markets, provide SMEs with a variety of financial products, the main measures are: to cultivate commercial finance company, to develop secured credit. To further improve the various types of loan guarantees to carry out discounted accounts receivable financing, inventory financing and other financing business, to meet the needs of small and medium enterprises the flexibility of mortgage loans. Encourages insurers to develop more business-oriented SMEs, insurance loans, such as insurance and mortgage loans. Securities companies to encourage the development of SMEs and to hold securities or bonds as collateral lending operations. As soon as possible the leasing business to opening up to allow the vendor finance leasing companies low-threshold access to trade credit (ie supply side to interest-free, amortization terms to small business financing, in essence, installment), equipment supply provider of trade credit to finance operations. The establishment of savings and loan associations and other non-bank financial institutions, specifically for low-risk real estate and other specialized loans to individual businesses.         (D) The Government should take effective measures to increase support for small and medium enterprises financing. First, the establishment of small and medium enterprises or explicit authority similar to the U.S. government regulatory agencies, overall coordination, supporting the promotion of small and medium enterprises development. The second is to assist SMEs to establish strategic goals, strengthen its 'hematopoietic function' for the purpose of financial support by the government policy against the background of financial institutions. Government to provide financial resources to supporting SMEs, entrepreneurship and innovation in micro-credit support, such as small and medium enterprises 'technical transformation loans' issued to implement discount policy; right entrepreneur to give small loans and interest subsidies. The third is to actively support and a pilot project to facilitate SME financing a variety of local private investment companies, venture capital investment firm dedicated to a higher level of risk and is difficult to get investment support from the general channels, small and medium enterprises (especially high-risk, high - proceeds of science and technology enterprises) to provide loans and investment, timely promotion of scientific research commercialization.         (E) improving the legal system of financing for SMEs         In order to build a comprehensive system of principles, as soon as possible to develop 'small and medium enterprises SME Financing Guarantee Law,''Act''Industry Investment Fund Law' and other laws, so that the various financing channels for small and medium enterprises have a legal basis, for example, on small and medium enterprises in China Private financing laws and regulations have been unclear, which limits the means of financing for SMEs. Improve the enterprise's legal system is the basic guarantee for the smooth development of small and medium enterprises, small and medium enterprises based on the survival of financial institutions, and operational guidance. It can guide the direction of investment in small and medium enterprises to protect the rights and interests of private investment to promote the healthy development of small and medium enterprises. The transparency of the lower interest rates. Recently, the People's Bank and the World Bank in the East, central and western regions of seven samples of urban areas of the study showed that 87.8% of the financial institution that loans to SMEs than large corporate loans have higher default rates; 75.5% of the that financial institutions, private loans than state-owned enterprises have higher loan default rates. In the study involving a sample of cities, the formation of SME loans to non-performing assets ratio of total non-performing assets as high as 63.9%; 6 is the lack of a comprehensive nationwide social credit system. Nationwide improve the social credit system led to a lack of financing difficulties of SMEs as a key reason. This imperfect social credit system lead to higher information asymmetry, thereby increasing the cost of financing the enterprise and banking credit costs. The highly concentrated banking system, the lack of financing for SMEs with the appropriate medium and small banks, also contributed to the financing problems of SMEs in China highlights one of the reasons.         (B) Bank of factors         1. Commercial bank loan management plagued by problems. Ch