Tackling Both Small And Medium-Sized Enterprises' Financing

SMEs can not regard listing as the only life-saving straw. To solve the problem of financing difficulties of SMEs, we need the efforts of the whole society.

How difficult is it for small and medium-sized enterprises to raise funds?

From the recent NDRC's survey of small and medium enterprises in China, we can see that the proportion of SMEs refused to lend because they could not implement the guarantee was 23.8%, plus 32.3% refused to lend because they could not implement the mortgage, and the rate of refusal to lend was 56%.

It is a common problem faced by small and medium-sized enterprises all over the world that financing is difficult, and even rich countries with abundant financial resources are no exception.

So, what causes the financing difficulties of SMEs?

Where is the difficulty of financing?

Daniel Chan, general manager of Shenzhen Xuan Huang pioneering Cci Capital Ltd, believes that the lack of a comprehensive nationwide credit system is the key reason for the financing difficulties of SMEs.

This imperfect social credit system leads to higher information asymmetry, thus increasing the financing cost and bank credit cost.

He also pointed out that the banking system is highly centralized and lacks suitable small and medium sized banks to provide financing services for SMEs. This is also one of the reasons leading to the prominent financing problems of SMEs in China.

On the other hand, commercial banks believe that some small and medium-sized enterprises have relatively low operating efficiency, and credit is generally not high.

At the same time, because of the characteristics of small and medium enterprises loan, such as the amount of filial piety is high, the time is urgent and so on, the management cost of loans to SMEs is relatively high.

In addition, the financial reporting system of some small and medium-sized enterprises is backward and the information is opaque, which increases the difficulty of the bank's examination of the financial information of the enterprises.

These are important reasons why SMEs are unable to obtain financing support from banks.

It can be seen that the problem of financing difficulties for SMEs in China lies in the narrow financing channels, and the underlying reason is institutional barriers.

Therefore, systematic countermeasures should be taken to solve the financing difficulties of SMEs in China.

As mentioned earlier, the financing difficulty of small and medium-sized enterprises is a worldwide problem, resulting in many reasons.

Therefore, in order to solve this problem, we need the joint efforts of enterprises, financial institutions and the government.

Daniel Chan believes that we should first establish a specialized SME loan department in state-owned commercial banks, attach importance to and guarantee the financing operation of SMEs from the bank level, or allow state-owned banks to have greater interest rate floating rights when lending to SMEs, so that the benefits and risks of bank loans can be effectively linked to banks and guide banks to lend more to SMEs.

Secondly, it is necessary to improve the financing guarantee mechanism of SMEs, to establish SME loan guarantee institutions under the participation of the government, and to provide guarantee for SME loans.

He also suggested that the state should formulate and promulgate laws and regulations on SME credit guarantee as soon as possible.

In response to the financing difficulties of SMEs, the bank also needs to constantly innovate and introduce financing tools to meet the needs of SMEs.

In this respect, the "self liquidating trade financing" service launched by the deep development in the whole country can enlighten us.

"Self liquidating trade financing" no longer emphasizes unilaterally the financial characteristics and industry status of the subject, nor does it simply make credit decisions based on the isolated evaluation of the trusted entity, but really pays attention to and combines its real trade background.

If the strength and scale of an enterprise can not reach the traditional credit access standard, and the upstream and downstream enterprises have stronger strength, the trade background is real and stable, and the bank can effectively control its capital flow or logistics, the enterprise can get the credit support of the bank.

The underlying reason for the financing difficulties of SMEs is institutional obstacles.

Therefore, only institutional reform can solve the fundamental problem.

For government management departments, it is feasible for the government or other organizations to set up specialized SME financing institutions (developing local small and medium private banks) and develop small and medium-sized enterprises' capital markets and venture capital funds for small and medium-sized enterprises.

According to the former practice, Zhang Chenghui, a researcher at the State Council Development Research Center, pointed out that because local small and medium financial institutions are familiar with the local situation, it is easy to understand the local enterprises' operating conditions, project prospects and credit level, so that they can overcome the obstacles of higher paction costs resulting from asymmetric information, reduce service prices and meet the needs of both sides of capital supply and demand.

Therefore, only by vigorously developing local small and medium-sized private commercial banks can we effectively provide financial support for SMEs.

In view of the problems exposed by the state-owned banking system, the local small and medium-sized banks should not continue to adopt the state-owned or state controlled ownership mode, but should be based on the shareholding system constructed by private capital.

Dr. Wang Yisi, a Chinese Academy of Social Sciences, has unique opinions.

He believes that the establishment of a multi-level, small and medium-sized capital market system for small and medium-sized enterprises should mainly include two levels: the second board market and the regional small capital market. In terms of their division of labor, the second board market mainly solves the financing problems of SMEs in the middle and late stages of entrepreneurship. The regional small capital market mainly provides financing services for SMEs who can not meet the qualification criteria for second board market, including providing private equity capital for SMEs in the early stage of entrepreneurship.

He further pointed out that the regional small capital market can be pformed from the original securities trading center, the existing property rights trading market and the technical property rights trading market.

In view of the lessons of the past regional securities market, we should pay attention to standardizing and strengthening supervision when constructing this market.

The key points of regulation and supervision include: stock listing and information disclosure standards and rules; stock trusteeship clearing system; market intermediaries' market access, exit rules, trading rules, information disclosure and so on.

We should actively develop the corporate bond market and the long term bill market, and enrich the variety of pactions in the capital market.