Research On The Government’s SMEs Financing Regulation During The Informal Finance Normalization

This paper introduces the current situation of the relation among SMEs, informal finance and formal finance, and analyzes the defect of the government’s regulation on SMEs financing. The basic consistent views at present are that we have not been formed a benign interaction mechanism among SMEs, banks and the government, and we are lack of perfect legal system and administrative system; and the government’s regulation on informal finance is still relatively ineffective, but is gradually make it normalization. On the other hand, the informal finance market has been one part of our financial system that cannot be ignored, especially the influence on SMEs’ financing. The point of this article is to advice the government can regulate formal financial institutions and informal financial institutions simultaneously, make informal financial institutions normalization, formal financial institutions strengthen financing support on SMEs.This paper is based on the financial pilot reform background, based on the game theory, regulation economics, using4two-sides game model to analyze the obstacles comprehensively and essentially during SMEs seeking loans from informal finance, and analyze the advantages and disadvantages of informal finance in breaking these obstacles to help SMEs’ financing comparatively. On this basis, this paper will bring government role into the models, to construct a tripartite game model including a informal finance, SMEs and government, so as to study how the government should take choice way in informal finance regulation; construct tripartite game model including a formal finance(bank), SMEs and government, so as to study how the government try to solve the financing difficulties of SMEs through influencing normal finance(bank).Combined with the2tripartite game models’ conclusion, this paper will provides corresponding countermeasures and suggestions from SMEs’level and government’s level.