Sichuan Large Commercial Bank For SME Strategy

Since reform and opening, in a market economy and opening up policy stimulus, the development of SMEs is vigorous in China. After the case of "Eleventh Five", Sichuan Province, the number of SMEs in industrial and commercial registration of34.5million, the industrial added value was718.01billion Yuan, contributing more than50.8%of GDP,400million to resolve employment.However, the stage of rapid growth in small and medium enterprises, China’s financial institutions can not provide credit support. The source of funds for SMEs are not strong in urgent need of foreign support, especially the commercial banks of credit support。Of today’s highly competitive financial institutions, the competition of commercial banks in the business is very obvious. Steady increase in SME profitability and help banks diversify risk, and its future development potential, for a new credit market, the commercial banks in Sichuan should be bound to lending to SMEs as a strategic adjustment of a new direction.SME financing difficulties due to the inherent cost of bank loans is not the size and information asymmetry between banks and enterprises:The relationship between banks and enterprises by the principle of economies of scale, large enterprises are in its period of rapid growth has been strong support scale, and SMEs’"retail" business in the commercial bank are unpopular.Between large enterprises and commercial banks, there is inevitably the case of asymmetric information; however, SMEs are more serious. There are so many reasons:1) SMEs lack of collateral and collateral, can not prove their credit status.2) Obvious flaws financial system for SMEs.3) SMEs more difficult to obtain private information.4) SMEs have hidden information motive.4) Bank for SMEs do not have the technology fully credit investigates for SMEs.5) Exclusion of bank credit system for SMEs.6) Banks as limited rationality of economic man.June2009, Bank of China Sichuan Branch establish Ministry of SME, called credit facility It has several characteristics:1) Product design standardization.2) Streamline operations3) Collecting soft information from "multi-channel".4) Bulk operations. Banks seek customer, commercial banks can make the process of decomposition of the large number of small and medium-volume loan process costs. Again, the traditional accountability has been discarded, replaced by a "probability of accountability mechanisms."Sichuan branch of the SME Department was established in June2009,"credit factory" is based on portfolio management, use of standardized, end to end "assembly line" operation and professional division of labor. SME credit guarantee institutions join to credit factory to control risk.SME Loan Bank of China Sichuan Branch of advantages:1) Break costs do not scale.2) Out of the dilemma of asymmetric information, customer-oriented way of credit, dredging of the information asymmetry.Bank of China, the Ministry of SMEs in the client survey and risk control is a good performance."Credit factory" in the implementation of the inferior branch of Bank of China Sichuan Province:1) The impact of agency costs on the decision-making:1In the authorization, delegation of authority still has reservations;2) High demand and low efficiency of the conflict;3Incentives and wire management paradox.Large commercial banks in Sichuan recommendations:the first, establishment of an independent legal system of "credit factory" mode:1) Independent legal system can liberate large banks within the constraints of hierarchy, reducing agency chain, further decentralization.2) Decision-making more efficiency due to independent legal system to shorten agent chain.3) Pay system changed for the better. The second, strengthen the security of large commercial banks and specialized institutions strategic relationship, but the proportion of risk assumed to be rationalized between banks and Professional security organization. The third, establishing a professional SMEs credit team.In this paper, the theory of economic management scale of costs, information asymmetries, credit rationing theory, economic man are all is used. And the innovation of this paper is Case Study。Hope to the future of large commercial banks in Sichuan SME credit business development approach and direction reference.