Analysis On Financing Model Of Smes

Since the reform and opening up over 30 years, China has made great achievements in economic development, and growth and development of SME is one of the major reasons for this achievement. Today, the SMEs have been playing an important role in promoting economic development, expanding employment, promoting technology innovation, activing market economy and so on, and they have become boosters of China's economic development. However, the financing difficulties has still been a major problem SMEs facing, which is a major bottleneck to constraint the development and growth of SMEs.Financing difficulty of SMEs, not only because of the inherent deficiencies of SMEs:but also of financial weakness, single product, scientificless management, high management risk, the more important reason is Chinese financing market failure and system failure. Because of inherent deficiencies of SMEs, financial institutions (mainly banks) are to be more willing to loan bank funds to those large and medium-sized enterprises with scientific management and relatively small operational risk, which has caused phenomenon like "reluctance loans", "more careful loans "and even" refused loans "to SMEs, etc. The nature of financial institution's pursuit of profit and monopoly on financial markets of state-owned banks make small and medium enterprises difficult to deal with the problem of getting loans in use of market mechanisms. But our existing system is not capable to make the financial institutions to provide adequate financing for SMEs. Government needs to play its "visible hand" role, to make up for market failure and ruduce the system failure, to create a favorable financing environment for the healthy development of SMEs.Therefore, this article is based on defining the concept of SMEs, from the current situation of SMEs' financing, and from different perspectives (enterprises themselves, banks, small and medium financial institutions, government) to analyze the causes of financing difficulty of SMEs.At the same time, based on the analysis of the success of Shouguang model in SME financing, drawing the experience of foreign financing,this paper puts forward proposals for the financing of China's SME.