Seven Strategies To Ease SME Financing Difficulties

Economist Tang Min discussed the alleviation of financing difficulties for SMEs: "I have two suggestions. First, can we allow some excellent loan Guarantee Corporation to upgrade to banks?

The two is whether we can encourage the private sector to establish a large number of urban SME loan companies.

Now that we have rural microfinance companies, can we set up a number of credit companies for small and medium enterprises or even micro enterprises in the city? "

Guangdong investigated 500 relatively good small and medium-sized enterprises in the region. The results are as follows: more than 95% of the SMEs lack funds. By the end of 2007, the balance of loans for small enterprises in Guangdong was 52 billion 590 million yuan, 105 billion 260 million yuan lower than the beginning of the year, and 66.7% reduction; the guarantee business of SMEs in Guangzhou was 13 billion yuan, only 1/10 of demand; the number of accumulative guaranteed loans was less than the one percent of demand enterprises.

This is a relatively good 500 small and medium-sized enterprises, other SMEs can imagine.

Not only in the Pearl River Delta, but actually the Yangtze River Delta is facing the same difficulties.

According to the survey of Zhejiang SME Bureau, the number of new loans for SMEs in Zhejiang province decreased by 7/8 between January and April this year.

The annual interest rate of underground financing in Zhejiang and Guangdong is as high as 50%-100%.1-4 months. The financial cost of SMEs in Zhejiang has increased by 40.6%, of which net interest expense has increased by 45.2%..

For example, the survival rate of small and medium-sized enterprises is low (see A07 Layout 1). The United States, which is known as the most developed market economy, has a series of preferential policies and financial support to support small and medium-sized enterprises, but even so, the survival rate of SMEs in the United States is more than 5 years, accounting for 32%, and 8 years or more, accounting for 19%. In the 10 years, only 13%. as a bank, loans to small and medium enterprises, can money be collected?

A bank is also an enterprise. If an enterprise is bankrupt and the loan can not be collected, it will of course choose not to lend.

Therefore, banks will be very careful to choose, and their important task is to select the 13% enterprises that have survived for more than 10 years to ensure that the enterprises return the loans to the banks.

In addition, there is also the integrity of SMEs.

Compared with large enterprises, banks need to spend more energy to understand the operation of SMEs and what is the risk of loans. According to statistics, the cost of admissibility and supervision of SMEs is 5-8 times larger than that of large enterprises.

Apart from general problems, we still have many problems with Chinese characteristics.

The first is the definition of small and medium-sized enterprises. What is small and medium-sized enterprises?

For example, our bank said that loans to 70%-80% have been given to small and medium enterprises, and there are many preferential policies for SMEs. Why do we still say that there is no benefit to SMEs?

A very important reason here is that we define the small and medium enterprises too broadly.

We define that 2000 or less enterprises are called small and medium-sized enterprises, which are called big enterprises in foreign countries, and only 500 people are SMEs.

With such a broad definition, our preferential policies for small and medium-sized enterprises have been enjoyed by medium-sized enterprises, while small and micro enterprises have not received tangible benefits.

Another problem is that there are too many big banks and too few small banks in China, especially the real private banks. Even these rare private banks also want to invest in large enterprises, because the whole financial system and mechanism are designed for large enterprises, and banks do not have more investment incentives for SME loans.

Moreover, the big enterprises in China do not have any other financing channels themselves.

Large enterprises abroad do not have to look for bank financing, for example, they can issue bonds, commercial promissory notes, borrow money directly from the market, and do not need to borrow long-term loans through banks.

China's bond market is very weak, and all big enterprises rely mainly on bank loans.

As a bank, there are big business loans and small business loans. Of course, it first meets big business.

It can be said that the financing difficulty of SMEs is a long-term phenomenon.

Why is it particularly difficult since the second half of last year?

Why did the interest rate of private finance suddenly rise so high during this period?

This is still related to our macroeconomic regulation and control.

From the end of last year, the "two prevention" (to prevent economic overheating and prevent inflation) is to reduce China's excessive economic growth rate.

From last year's 11.9% pressure to 10.1% in the second quarter of this year, it has been close to 2 percentage points.

Obviously, these 2 percentage points finally fall on the small and medium-sized enterprises.

In my opinion, the next step in macroeconomic regulation and control should be rethinking this question. Is it important to sort out the major projects of those governments on the basis of priorities and put all those necessary and national economic bottlenecks on the top? And those may not be that important. Although the projects that are necessary from the long term but not so urgent should be postponed and stopped, especially those achievements projects, we should stop them and let these big projects and big enterprises share the cost of macroeconomic regulation and control, and meanwhile, spare part of the capital and resources to the small and medium-sized enterprises.

How to ease the financing difficulties of small and medium enterprises, policy, in the medium to long term, we need policy support for SMEs.

First of all, we have introduced the SME Promotion Act, but what is the implementation situation in various areas? How much has it played?

We need to conduct a law enforcement inspection on the SME Promotion Act as soon as possible.

Secondly, the SME Promotion Law itself has the nature of promoting and encouraging by the government. It is not clear about the rights and obligations of rights and obligations, and the binding force of various departments is not strong enough.

In many countries, Kaizong Akiyoshi is the law of small and medium enterprises.

Therefore, we should also consider formulating a law on small and medium enterprises to clarify the management mechanism of small and medium-sized enterprises and the responsibilities of governments at all levels, as well as the responsibilities of all sectors of society.

It is suggested that the SME law be amended to clarify the management mechanism of SMEs and standardize the fund management systems related to SMEs.

Thirdly, all localities should formulate rules for the implementation of SME law, and establish and adjust relevant supporting laws, regulations and policies.

The devil is in the details.

Two, in the developed countries, the income tax rate of SMEs is generally less than half of that of large enterprises. However, the tax relief for SMEs in China is far less than this level.

Moreover, small and medium enterprises can take various forms of tax rebate, such as accelerated depreciation, relaxation of cost standard, equipment investment credit, reinvestment tax refund and so on.

In addition, individual proprietorship and partnership SMEs should be allowed to choose between corporate income tax and personal income tax to avoid duplication of taxation.

Three, the financial regulation and control in the next eight years to make some fine-tuning, it seems imperative.

If monetary policy is relaxed, attention must be paid to small and medium enterprises, especially small businesses and micro enterprises.

But if banks are allowed to make their own decisions, it is hard to ensure that they will go to small businesses and micro enterprises.

Therefore, it is necessary to strengthen the "window guidance" and supervision of commercial banks in terms of macro regulation and control. The policy of funds should deal with the small and medium-sized enterprises to open up one side, ensure the reasonable total loans to SMEs, and increase the financing of the efficient small and medium-sized enterprises in the market.

Why do I emphasize efficiency here?

It is because SMEs can not get loans, if all SMEs can get loans, this will drag our entire banking industry down.

In addition, the production and circulation of small loans under a single household of less than 500 thousand yuan should not be affected by regulatory policies.

Four, to establish a number of financial institutions serving SMEs, we should not only take some short-term measures to alleviate the financing difficulties of SMEs in China, but also take the opportunity to introduce some long-term reform measures. This is to let go of private banks. If all banks in China maintain state-owned banks and foreign-funded banks as a supplement, it will be a long-term disadvantage to the financing of SMEs in China. China needs a large number of small and medium-sized private financial institutions, which mainly rely on small and medium-sized enterprises to finance their businesses.

I have two suggestions. First, can we allow some excellent loan Guarantee Corporation to upgrade to banks?

The so-called Guarantee Corporation refers to individuals or enterprises in the bank loans, banks in order to reduce risks, do not directly lend to individuals or businesses, need a lender to find third parties (Guarantee Corporation) to provide credit guarantee.

According to the requirements of banks, the Guarantee Corporation will let the lender issue the relevant qualification certificates for examination. Finally, the information will be handed over to the bank, the bank will review the loan and the Guarantee Corporation will collect the service charge.

The two is whether we can encourage the private sector to establish a large number of urban SME loan companies.

Now that we have rural microfinance companies, can we set up a number of credit companies for small and medium enterprises or even micro enterprises in cities?

I think it is very feasible to upgrade the excellent Guarantee Corporation into a bank at present.

Guarantee Corporation has a history of nearly ten years in China. Since the first batch of Guarantee Corporation was established in 1999, thousands of such small and medium-sized enterprises have been Guarantee Corporation.

Ten years have passed, and some Guarantee Corporation have been very successful.

For example, Shenzhen Zhongzhi Guarantee Corporation, founded in December 1999, is now the largest private business guarantee group in China. At present, there are more than 30 companies holding shares and holding shares.

Branches have been established in Shenzhen, Beijing, Shanghai, Guangdong, Fujian, Hunan, Hebei, Chongqing, Jiangsu and Zhejiang, with assets of 3 billion yuan, with a total secured loan amounting to 70 billion yuan.

You know, the whole city of Guangzhou only guarantees 13 billion yuan.

The Asian Development Bank, the American flag group, the American Carlyle investment, General Electric Company and so on all share in it, because its credibility is very good.

In addition, there are also successful Guangzhou's silver and Beijing Zhongguancun guarantee, Shenzhen SME Guarantee Center and so on.

These Guarantee Corporation have nearly ten years of successful experience and have the core competitiveness of a small and medium-sized enterprise bank.

The core business of a bank is more than two, one is deposit, the other is loan, and the most difficult one is loan.

Loan companies have such core competitiveness, so turning it into a bank is a natural course.

Moreover, upgrading these good Guarantee Corporation to small and medium-sized banks will not increase the country's financial risks. Why is it so difficult to register a bank?

Banking is a very special industry, because banks are deposits. For depositors, they give their lives to banks. When banks collapse, the whole society will be unstable. So the whole world is very cautious to banks.

And we have already had nearly ten years of operation experience, which has been proved by the market that it can run well and even upgraded to a small and medium-sized bank, even better than our existing banks. This is much less risky than the success of our Guarantee Corporation, and the success rate is much larger.

In addition, there are now thousands of Guarantee Corporation, some do well and some are not doing well. Once the well done Guarantee corporation can be upgraded to a bank, this will give the guarantee industry a shot in the arm and injects a huge hope: as long as you do well enough, you can upgrade to a Bank and have a better development, so more capital will be put into the guarantee industry, and the guarantee industry will have a great stimulation.

This can provide a long-term and lasting impetus for alleviating the financing difficulties of SMEs.

Besides raising the guarantee industry, what else can we do?

I think at present, a small and medium-sized loan company can enter the city quickly and larger.

What is a small loan company?

Loan companies only provide loans, do not absorb deposits, investors use their own money to lend to small and medium enterprises, and receive interest by charging interest.

Because loan companies do not absorb deposits, there is no great risk for the state and society.

In case of loan problems, only shareholders' capital loss.

What is the average interest rate of small loan companies in rural areas?

Probably between 18%-22%, most of them are doing very well at present. The rate of bad loans is very low and profits are good.

If we expand our business to cities and set up a loan company for urban SMEs, this will have a greater incentive for investment.

For example, SME loan companies can be allowed to operate within a city and adopt wide access. After several years of operation, they can allow good companies to accept wholesale loans from large banks, and outstanding loan companies can even be upgraded to small and medium-sized banks.

This can attract a lot of private funds into small and medium enterprises loans, and put a large number of illegal activities of private fund-raising and usury into normal.