Analysis: Shishi Clothing Industry SME Cluster Financing Mode

Shishi is a county-level city belonging to Quanzhou city of Fujian province. It is an important economic center in the southeast coastal area of China.

Production base.

At present, the apparel industry in Shishi has formed a complete industrial chain from textile, accessories production, dyeing and finishing, clothing production, sales and so on.

In view of the current financing difficulties of SMEs in China has become a prominent problem. As a highly concentrated industrial cluster, the financing modes of small and medium-sized enterprises in Shishi garment industry relying on clusters are typical, and have reference significance for solving the problem of SMEs' financing difficulty in China. Therefore, this paper makes a Study on the financing mode of SMEs in Shishi's clothing industry.

The so-called "cluster financing" or "clustered financing" refers to a financing method for small and medium-sized enterprises to establish a financing alliance through consultation, reduce information asymmetry, reduce financing costs and help each other to obtain funds.

As a highly concentrated industrial cluster, Shishi garment industry has been well developed. Cluster financing of Shishi's clothing industry in recent years mainly includes the following modes:

Joint guarantee loan financing mode

United insurance loan is Shishi.

One of the first cluster financing modes was developed.

UNPROFOR loan refers to a group of borrowers who form a consortium to apply for loans to banks. If the banks do not require collateral or other guarantees, each borrower will bear joint liability guarantee for all other borrowers in the loan amount.

In 2007, three small and medium-sized enterprises in Shishi obtained 21 million 550 thousand yuan joint guarantee loan from China Construction Bank and became the first joint guarantee loan loan issued by Fujian province.

In the joint loan and joint insurance mode of small and medium-sized enterprises in the clothing industry cluster of Shishi, all the small and medium-sized enterprises in the joint guarantee loan body provide joint and several liability guarantee to each borrower. When a joint guarantee member debt expires, the creditor can ask the debtor and other guarantor to repay the debt. The debtor and all the guarantor need to fulfill the debt. The guarantor or debtor can not make a defense on the grounds for not paying debts or partial repayment of debts.

If the debtor is unable to repay, the guarantor may recover the debt from the debtor after he has paid off the debt, and the less part will be shared by the guarantor of the joint guarantee body in the agreed proportion.

If all debts are not paid in full after default, all members of other groups will not be able to obtain re loans from banks.

The joint insurance loan system has made some progress since it was launched in the apparel industry cluster in Shishi in 2007. However, because of the internal and external causes such as monetary policy tightening since then, it has not achieved comprehensive and rapid development.

The mutual guarantee financing mode based on Guarantee Corporation refers to the establishment of Guarantee Corporation Based on cluster enterprises. The purpose of Guarantee Corporation is not to make profits, and to follow the principle of "voluntary combination, honesty and trustworthiness, and risk sharing". It serves as the tenet of "promoting shareholder's economic benefits, supporting and promoting the healthy development of stock East", and implementing "membership system" loans.

That is, membership fees should be paid by member enterprises, and the "mutual aid fund" should be set up as the capital of Guarantee Corporation, and then the Guarantee Corporation will provide guarantee to the members of the Guarantee Corporation to enlarge the secured loans to the banks.

In this mode, if a loan company breaks the contract in the course of operation and causes the loan maturity to be unable to repay, the Guarantee Corporation will use the enterprise mutual aid fund to repay the loan and bear corresponding responsibilities and risks.

According to the development of Shishi based on Guarantee Corporation's mutual guarantee financing mode, the start of the cluster financing mode in Shishi began in 2006, when Shishi's first Guarantee Corporation was registered.

By the beginning of 2009, there were 15 Guarantee corporation registered in Shishi, including financing and non financing businesses.

In recent one or two years, with the introduction of the national and local guarantee industry policies, the Shishi guarantee industry has gradually entered the right track, and the whole industry has been gradually standardized. So far, there are more than 30 guarantee institutions in Shishi. From the perspective of its scope of operation, it mainly provides SMEs with various guarantee businesses, such as liquidity guarantee, performance guarantee, and so on.

With the lack of mortgage, many small and medium-sized enterprises in Shishi, especially the clothing industry cluster, have been financing more and more banks in the form of Guarantee Corporation and other forms of guarantee such as Guarantee corporation or industry organizations established by mutual funds. The Shishi guarantee industry has also made great progress.

Attempt to supply chain finance

Supply chain finance is a cluster financing mode which has been widely concerned by banks in recent years. It is a cluster financing mode based on the industrial chain and relying on the supply and marketing relationship between the upstream and downstream enterprises in the cluster.

From the perspective of the existing supply chain finance in Shishi, its financing mode usually relies on the strong credit or risk slow release means of the strong buyer or seller, on the basis of controlling the enterprise logistics and capital flow, and provides various financial product combinations and solutions for SMEs in the procurement or production and marketing links such as targeted credit enhancement, financing, settlement, account management, risk participation and risk aversion.

Its important feature is to closely integrate the upstream and downstream enterprises in the supply chain, and to provide credit enhancement for SMEs in the upstream and downstream of the supply chain based on the real trade background, and thus get bank financing.

From the perspective of supply chain finance in Shishi apparel industry cluster, supply chain finance has the advantage of reducing the access conditions of SMEs.

Supply chain finance is mainly aimed at the supply and marketing chain of products, that is, the upstream and downstream enterprises of the core enterprises in the supply chain, that is, strong buyers or strong sellers.

In the credit evaluation of the upstream and downstream SMEs, it is no longer simply to evaluate individual enterprises, but rather considering the status and role of SMEs in the supply chain, introducing their trading behavior with core enterprises into corporate financing, through the credit enhancement of core enterprises to SMEs, reducing the entry threshold of SMEs, and solving the financing problems.

Viewing the comparative advantage of small and medium sized enterprises cluster financing from the cluster financing of Shishi garment industry

From the perspective of the cluster financing mode of Shishi's clothing industry, compared with the independent financing behavior of a single enterprise, the operation mechanism of cluster financing has many advantages to enhance the financing capacity of small and medium-sized enterprises, which is embodied in the following aspects.

Cluster financing reduces the asymmetry of information.

Frequent exchanges and interactions among enterprises within the cluster speed up the flow and diffusion of information, enabling banks to make effective use of the information and reusing the information when lending to the same industry, so that business can be carried out in batches, and information search integration is saved.

Cluster financing reduces credit risk.

On the one hand, its special internal embeddedness increases the default cost of enterprises. On the other hand, the pmission of information in the industrial chain helps to establish multiple game strategies between enterprises and banks, all of which make enterprises in the cluster pay more attention to their own credit.

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Cluster financing helps financial institutions to increase their profits.

By providing loans to enterprises in the cluster, banks can get more interest income.

This is mainly manifested in two aspects: bank loans to cluster enterprises, lending rates can rise on the benchmark interest rate; not only that, the internal business of the cluster is relatively stable, and the competitiveness of enterprises has certain guarantee. Even in the face of financial difficulties, enterprises in the cluster are more likely to get financial support from customers and suppliers, such as interbank borrowing and deferred payment, thus forming a value amplification function of funds.

So as to ease the crisis and speed up regional economic growth, and ultimately increase the bank's earnings.

Suggestions on further improvement of SME financing in Shishi garment industry

From the comparative advantage of SME cluster financing, cluster financing has the advantages of reducing information asymmetry and reducing risks, thus making SMEs easier to obtain financing. Therefore, cluster financing should become an important way to solve the financing difficulties of SMEs. Therefore, it is of great significance to further improve and improve SME cluster financing.

Next, this paper puts forward suggestions for further improvement of the existing SME cluster financing mode in Shishi clothing industry.

Increasing the promotion of debt financing instruments

In the cluster financing mode, small and medium enterprises' collection bills and regional set up bills are new debt financing tools specially designed for small and medium-sized enterprises in recent years.

Small and medium-sized enterprises collecting bills are 2~10 set of SME debt financing instruments which are unified product design, unified brand name, unified credit level and unified issue registration. Since the launch of China's collective bills in 2009, a total of more than 40 issues have been issued, with a total circulation of more than 10 billion yuan, of which 4 billion 909 million yuan was issued in 2011.

The first collection of small and medium-sized enterprises in Quanzhou, Shishi, was issued in November 3, 2011, collecting the bills for small and medium-sized enterprises in Jinjiang, with a scale of 220 million yuan.

The regional excellent note is designed by the interbank Dealers Association on the basis of collecting bills of small and medium-sized enterprises. The main difference between it is the introduction of the government as an important participant and the government's role as an introducer and credit enhancement agent.

The introduction of regional gifted notes is widely welcomed by small and medium-sized enterprises. Since its release in November 2011, 5 Regional premium notes have been issued in 2011 alone, amounting to 1 billion 389 million yuan.

It can be seen that debt financing tools can play a better role in solving the financing difficulties of SMEs. Issuing debt financing tools can provide enterprises with additional financing channels outside the traditional bank loans.

At the same time, debt financing tools can also effectively reduce the financing costs of small and medium-sized enterprises and reduce the operating pressure of small and medium-sized enterprises. For example, the current cost of financing is generally above 8%, while the interest rate of regional fine bill is only about 6%.

Therefore, at present, the promotion of debt financing tools can be used as an important breakthrough in developing the financing of SME clusters in Shishi's clothing industry and further solving the financing difficulties of SMEs.

Cultivating qualified intermediary organizations

The role played by intermediary organizations in the development of cluster financing is very important. Each financing person may not understand each other because there is no business connection or lack of access to the other party's information, and may also be unable to understand each other, and at the same time, it may also organize and design financing schemes due to lack of relevant talents, which makes cluster financing impossible to carry out in depth.

Therefore, intermediary organizations with coordination and professional skills not only contribute to the promotion of SME cluster financing, but also are necessary for further development of SME cluster financing.

In the Shishi apparel industry joint guarantee loan and Guarantee Corporation based mutual guarantee cluster financing mode, lack of coordination and professional skills of intermediary organizations is an important reason why it can not go further.

Therefore, in the financing mode of Shishi garment industry cluster, some key organizations such as trade associations and local chambers of commerce should play the role of coordination and organization and act as qualified intermediary organizations.

Industry associations and local chambers of Commerce have certain authority in industrial clusters, and at the same time, the information sources are relatively adequate, which can play a better organization and coordination ability, and promote the financing of small and medium-sized enterprises in clusters, and improve the probability and efficiency of financing.

The government should increase support and coordination.

Cluster financing is a kind of financial innovation under the condition that it is more difficult for small and medium-sized enterprises to raise funds. As a financial innovation, the local government should give full play to the coordination between banks and enterprises, enterprises and enterprises, enterprises and trade associations, and take measures such as policy guidance, capital support, and the construction of credit guarantee system, so as to promote the further development of cluster financing.

Specifically, in the cluster financing, the government should mainly play the following roles: first, play the role of organization and coordination; by guiding industry associations and local chamber of Commerce as intermediary organizations, giving full play to the advantages of industry associations and local chambers of Commerce in information and coordination, organizing and joining a group of small and medium-sized enterprises to carry out cluster financing.

The two is to play the role of supervision and restraint. Cluster financing also has its shortcomings. For example, some enterprises may not be responsible for the default of other enterprises in the joint lending institutions due to their low credit awareness, which has caused banks and other agencies to take a cautious intervention in cluster financing. Therefore, the government should give full play to its supervisory and binding role and take corresponding measures to improve the discipline and self-restraint ability of enterprises without liability for breach of contract.

Three, the government should introduce relevant discount policies in a timely manner. In the cluster financing, it is necessary to increase the cost of financing in order to coordinate organization and credit enhancement. In the process of cluster financing, such measures as the government to take relevant interest discount and reduce the burden on enterprises will play an incentive role in promoting cluster financing.

Improving and promoting the supply chain finance mode

Supply chain finance is a new financing mode launched in recent years. Because of its core business credit, small and medium-sized enterprises in the same industry chain can effectively realize financing, and is widely welcomed by small and medium-sized enterprises.

Supply chain finance has the advantages of reducing bank entry threshold and bulk development, and improving and promoting supply chain finance has long-term significance for solving the financing problems of Shishi's garment industry.

Judging from the current development of supply chain finance in Shishi's apparel industry, although supply chain finance has made good progress in Shishi's apparel industry in recent years, a number of well-known brand enterprises or leading enterprises such as China's limited company and Shishi Long Zheng import and export trade Co., Ltd. have all been collaborated as core enterprises to cooperate with banks to develop supply chain finance, which helps their upstream and downstream SMEs financing in banks, but there are also problems such as single financing products, often only simple liquidity loans, relatively cumbersome business procedures, and lack of in-depth publicity and promotion.

The existence of these problems makes supply chain finance unable to develop rapidly.

To solve these problems, the government should guide banks to simplify the handling procedures of supply chain finance business, establish green channels, improve the financing efficiency of enterprises, develop and innovate financing products, and reduce the cost pressure of enterprise funds through product innovation.

In addition, the government should take the lead in strengthening the supply chain finance publicity through organizing the bank enterprise docking meeting, so that the enterprises can fully understand the advantages of the supply chain finance mode, increase the chance of docking between banks and enterprises, and effectively promote the supply chain finance.

To sum up, the clothing industry cluster in Shishi has some typical characteristics. From the main mode of small business cluster financing, we can see that cluster financing has the advantages of reducing information asymmetry, reducing risks and improving the profits of financial institutions.

In addition, in order to further improve and develop the SME cluster financing of the garment industry in Shishi, it is necessary to strengthen the promotion of non debt financing tools, improve the supply chain finance financing mode, cultivate qualified intermediary organizations, and enhance the support and coordination of government in the small and medium-sized enterprises cluster of Shishi garment industry.