On The Operating Mode Of Relational Credit

With the rapid development of SMEs, the financing problem gradually aroused people's attention; at the same time after China joining in the WTO, increasing competition in financial markets, the small and medium banks are difficult to develop long-term and stably in the financial markets. Relational credit can solve these two problems. Through long-term cooperation of the SMEs and small banks, information asymmetry is weakened, but also can reduce financing costs and improve the competitiveness of small and medium banks themselves.Because of the China's economic, the theory and practical application of relational credit in china is later than the western developed countries. Through learning the relational credit in the western developed countries, author think it can be applied in china. So the article on the analysis of relational credit has certain theoretical and practical significance.The core content of this paper is the operating mode of relational credit in China MinSheng bank. Firstly the theoretical of relational credit is studied, including the interaction theory and agency theory between the banks and SMEs. Based on the theory analysis, author sunned up the characteristics and comparative advantages of relational credit.Secondly, the factors affecting relational credit are analyzed. From the quantitative point to analyze the main of relational credit, through empirical analysis to determine that the small banks and SMEs are the main participation body. The paper adopts the method of game analysis to analysis the strategies of the main participation body, In order to more clear the relationship, which is the operation mechanisms of relational credit.the relational credit is analyzed for second stages. In the first stages, accounting our country's special economic situation, the relational credit needs Government to establish the security organizations, by providing guarantees for SMEs to reduce the information asymmetry problem. The second stage is purely bank-enterprise cooperation. By analyzing the operation mechanism of relational credit, further determine that the relational credit is scientific. Because relational credit in China MinSheng bank is started early, but there are still some problems. This paper summer up these problems, and also provides some recommendations to further improve the application of relational credit in China MinSheng bank.