Research On SMEs' Financing And Financial Structural Optimization In A County

Being the basic geographical units in long-formed political and economic activities in Chinese history, county and county-level city are the most basic-leveled administrative units of organization and management in our economic and social development."The county well governed, the world will be in peace and tranquil; the stronger the county is, the richer the states are."Thus developing and expanding county economy has attained mutual recognition in the whole nation. However, in recent years, the county's economy has developed relatively slowly in a new round of rapid economic growth cycle and has become a weak part in national economic development. The main reason is resulted from the lack of sufficient financial support caused by low-degreed conformability in financial structure of county, county stage of economical development and resource endowment. Its concrete manifestation is that a conspicuous incompatibility exists between financing needs in SMEs (small and middle-sized enterprises) which are regarded as pillar in county's economic development and their funds provided by banking institutions. Financial obstruction has become"bottleneck"to restrict further development of SMEs. But exactly, the development of SMEs has a direct impact on that of county's economy, relating to success or failure in building a new socialist countryside. Therefore, the research on SMEs'financing and financial structural optimization is of great theoretical and practical significance.Faced with the difficulties of SMEs'financing, domestic and foreign scholars had carried out systematic and thorough researches, drawing a lot of valuable achievements. However, according to collected document materials, most of researches have been more concentrated on urban SMEs mainly depended on technological and capital's intensity, while paid little attention to county's SMEs mainly depended on labor intensity even if the number of the latter is dominant throughout the county. Some current researches are mainly the descriptions of phenomena and simple summaries.A lot of researches have proved that there is a stronger relevance between the development of SMEs and financial structure, demanding a multi-leveled and diversified financial system to meet financial needs of SMEs with different stages of development. In our country characterized by dual economy and double transferring, the financial structure is single; the financial market is monopolized by minor large-sized financial institutions; the development between civil financial organizations and SMBs (small and middle-sized banks) is dormant; and SMEs'financing is greatly constrained due to narrow channels. Therefore it is especially essential to optimize the financial structure in order to effectively solve the problem of SMEs'financing constraints. However, current researches on county's financial optimization mainly focus on blank problems led by removing and merging state-owned commercial banks, and on necessity and countermeasures of financial reconstruction, lacking a unified theoretical framework for analysis and a strong systematicness of countermeasures and suggestions.Based on the fact that financial suppression is prevailing at our present stage, this thesis has made thorough investigation on Hunan SMEs'financing constraints and financial structure. Through a large number of financing statistics and materials from survey on the spot, breaking the traditional research mode of regarding SMEs as a whole, and making demonstrative researches combined with SMEs'financing features on the basis of specific classifications of SMEs and its financing structure, this thesis probes into the relationship between Hunan SMEs'financing and financial structure, and illustrates the necessity and feasibility of county's financial structural optimization. A large number of actual data and typical cases provide this thesis with strong argumentations in theory and demonstration.On the basis of economic and financial theories (such as contract economics, system economics, transaction cost theory, credit ration theory, incomplete information economics and etc.), this thesis demonstratively offers theory interpretation of county's SMEs'financing and financial optimization. Taking full consideration for county's economic stage of development and resource endowment, it reveals function defects in the present financial structure.On the demonstrative basis of judging the gap in our SMEs'financing with the application of credit ration theory, this thesis integrates SMEs'features, government acts, the macro-environment and other factors into the bank's characteristic function, seeking SMEs'boundary information cost and marginal revenue point of equilibrium. On this basis of transaction cost theory, a framework of financial structural optimization has been established. Its core idea lies in that an efficient financial system arrangement should be able to achieve the minimum of transaction cost. Therefore, the logical starting point of this thesis is to inspect the financial structural optimization when attaching the most importance to the transaction cost.In discussing about the financial structural optimization, this thesis has always paid close attention to the problem of how to reduce the transaction cost in SMEs'financing activities. In this thesis, reducing the cost of solving information asymmetry and risk shares is an important standard to evaluate whether financial structure is beneficial for SMEs'financing. What's more, the basic idea of effectively reducing the transaction cost in county SMEs'financing through loosening financial control and upgrading credits in SMEs is also the principle of county's financial structural optimization. Through developing vigorously localized SMFI (small and middle-sized financial institutions) with information superiority, appropriate institutional arrangements, upgrading credits in SMEs and other aspects, this thesis presents related countermeasures that building financial structure adapting to county's financial and economic development is beneficial for solving county SMEs'financing constraints.