The Status Of Financing Of Smes, Causes And Countermeasures

It is generally said that small-and-medium enterprises (SMEs) play an important role in economic development. SMEs can upgrade economic development, improve market efficiency, optimize industry structure, drive technique innovation, increase employment chance, promote international trade, boost society stabilization. But what do not match with the tremendous contribution made by small and medium enterprises is the weak position of small and medium enterprises, especially the difficult loans, public financing, a serious gap between supply and demand of funds, has become a bottle neck restricting the further development of small and medium enterprises. It is becoming the community's concerns that How to promote sound and rapid development of SMEs.Under the guidance of the asymmetric information theory, the Pecking Order Theory and the Financial Growth Cycle theory, using a variety of research methods, namely, normative research and case studies combining, qualitative and quantitative combination method,this paper analyses the status quo of China's SME financing, the cause and the strategy.This introductory section describes the research background and significance, explicates the relevant concepts of the study and describes the research methods, the framework of papers. The second chapter describes three important theory of corporate finance, namely, asymmetric information theory, Pecking Order Theory and the financial growth cycle theory. The third chapter takes a lot of information and data analyzing the financing situation of SMEs in China, namely, the narrow channels of SME financing, the low proportion of loans, small bank credit, high financing costs. The fourth chapter in-depth analyses that the fundamental reason is that there is a serious information asymmetry, in order to avoid the adverse selection and moral hazard, the financial institutions, would be prudent to treat the financing needs of SMEs. The specific reasons for SME financing difficulties were as follows:on the one hand, SMEs has inherent disadvantages of financing, financial system of China's SMEs is not perfect, the overall credit is poor, operating results is poor; on the other hand, China's policies and systems of financing, bank financial service system for SMEs are imperfect, There is no fundamental equality of living space, financing treatment and development environment for small and medium enterprises. Then, under the guidance of the three major theories, The fifth chapter puts forward specific measures to improve the financing situation of China's small and medium enterprises from government support, banking services, security systems, and small and medium enterprises and other self-improvement. The sixth chapter also carries out case studies, using the case of SME Department of the Chengdu Bank to actually analyze the responses to improve the financing environment for SMEs. The seventh chapter gets the conclusions of this research.Innovations of this article is using the Pecking Order Theory and the corporate financial growth cycle theory, analyses financial difficulties of small and medium enterprises under special circumstances in China and proposes a solution. Deficiency is that data availability is limit, the article is lack of universality, this article only selects some of important aspects, the issues not involved needs to be followed in the future.