The Mechanism Analysis Of Mutual Action On Lending Between Banks And MSEs

Banks and enterprises, as two principal parts of credit market, have beenconnected by banks' credit and enterprises' financing. The credit actions between themaffect not only the efficiency and risk of the banks, but also the development of microand small enterprises (MSEs). With more intense competition, banks get less and lessspace of profit from big enterprises. Exploring the solution to solve the problem offinancing MSEs has great meaning to looking for new growth point of profit to thebanks. Meanwhile, loan of banks is the most important external financing resource forMSEs in china. Therefore, the settlement on bank loan to MSEs is significant both inthe development of MSEs and the construction of harmonious society.One important reason, which causes MSEs' financing difficulty, is asymmetricinformation between banks and enterprises. In order to solve this problem, the paperintroduces a new mechanism of "double-insurance" based on game theory. The firstinsurance, introducing the idea of group lending and making MSEs a group, has twofunctions: first, it can solve the rigid problem of information transmission in creditactions of MSEs with the result of separating the mixed credit market and avoidingthe adverse selection problem induced by information asymmetry; second, it can meetthe commercial banks' demand of scale economy in credit, and reduce the banks'transaction cost in credit payment process. The second insurance, introducing the ideaof improved multi-stage connected motivated bank credit contract based on thespecial need of MSEs financing which is small-scale, short-period, diversify, seriouslyclosed information etc and the shortage of group lending which can not confirm thetype of risk subjects and make against the diversified development of credit market.The idea can achieve separating equilibrium of credit market and give a living spaceto high risk group so as to confirm the diversity of credit market. The mechanismproposed in this paper can solve information asymmetry between banks and MSEsfrom interaction of two sides, which do a favor not only for banks' risk control, butalso for MSEs' credit financing and enhances credit market' efficiency effectively.