The Model Of Re-guarantee For The Small And Medium Enterprises' Loan In China

The SME credit guarantee system in China has developed rapidly, the number of which has already reached 4200. However, most of the existing guarantee agencies are too small, and the magnification is also too small, the potential risks exist too. Thus, it is urgent to establish re-guarantee system to share those risks, and expand the magnification of the guarantee institutions for SMEs to finance more solid supports. However, the theory of re-guarantee system lags behind the needs of the reality. Whether the governmental mode or the commercial mode of the operation is more suitable to the national conditions, and how to measure the efficiency of re-guarantee institutions have become valuable issues.The system of SME credit guarantee and re-guarantee cannot be accomplished overnight; it must take local conditions into consideration, and get useful experiences from the systems of Europe, Japan, and Korea. Currently, the credit guarantee has been developed in China to support SMEs. The analysis of international experiences and operation pattern on the re-guarantee system forms the overall framework of the re-guarantee system. Then, through further theoretical analysis, it leads out the conclusion that the construction of the governmental re-guarantee system is a better choice. The formula based on the model has been thought to be the standard of the efficiency of the re-guarantee system to promote the development of SMEs. Finally, in view of guarantee and re-guarantee system problems, and the theoretical analysis, the construction of re-guarantee system for SMEs in China has been proposed.The contributions of this paper include two aspects. First, sort out the development of re-guarantee systems of developed countries, emerging market countries and those of China; secondly, based on the existing model, a further advance has been made, and the final conclusion is that governmental operation is the optimal choice. Moreover, optimal levels of qualification and ratio are given to judge the operating efficiency of the re-guarantee systems.