Credit Guarantee Accounts Receivable Pledge Financing Deficit Of Mechanism Design

Small and middle enterprises (SMEs) play an important role in the economic and social development, but they can hardly get external loans. We first studied reasons for SMEs’financing difficulties, and found that investors believed large enterprises have higher business capabilities. Large enterprise wealth is the signal of higher business capabilities. SMEs have no effective ways to show their business capabilities under asymmetric information. This is another important reason for SMEs’ financing difficulties.Based on these findings, we believe the Credit Guaranteed Accounts Receivable Pledging Financing (CGARPF) can alleviate SMEs’financing problem. On one hand, it can make use of the accounts receivable between enterprises, which make up the problem of insufficient collateral in fixed assets for SMEs. On the other hand, SMEs can get higher assessment of the credit level. However, since investors worried about the moral hazard behavior of SMEs, CGARPF is not to get rid of the scope of the pledge in full.To solve this problem, we provided a new financing contract for ARPSCF which can be called "conditional contract". Compared to the debt contract and equity contract:(1) The "conditional contract" can be effectively bound by entrepreneurial moral hazard behaviors. So the "conditional contract" can increase the financing discount rate of account receivable for SMEs.(2) Under certain conditions, the "conditional contract" can get higher financing efficiency than a debt contract.(3) The "conditional contract" is a strict Pareto improvement to an equity contract in financing efficiency.At last, we discussed the social investments for every contracts, and found in a fully competitive environment the equilibrium method of finance is a "conditional contract". The "conditional contract" can achieve the First-best social investment.