The Impact Of Small & Medium Banks On The SMEs' Expansion Of Financing Size

SMEs make a great contribution to the economic development of our country. But in the process of their own development, the expansion demand of financing size can not be satisfied effectively. Many scholars contend that the main solution is to develop small & medium financial institutions vigorously, or to establish local small & medium commercial banks and cooperative credit financial institutions. Bank credit is the main way for the expansion demand of financing size because SMEs is in a weak position. This article analysis and consider that small & medium banks is to focus on the institutions to lend to SMEs from the Division of Labor and Specialization Theory for the first time. Compared with the large banks, small & medium banks have the advantage of cost and business process, and they can play a greater role on the expansion demand of financing size. By way of manual data collection, This article chooses the company issued a prospectus in SME Board of Shenzhen Stock Exchange as the research sample, and then empirical tests the role of small & medium banks to the expansion of financing size for SMEs. We find that small bank loan market share significantly affect the financing size of SMEs, and the borrowing costs will be lower if the SMEs loans greater proportion from small & medium banks. The research results show that bank credit is the main way for the expansion demand of financing size for SMEs, and their best option is to loan from small & medium bank, it has important practical significance for the healthy development of SMEs.