Research On SME Financing In China

As an important part of our national economy and the basic strength of an activemarket, SME (Medium-sized and Small Enterprises) has an irreplaceable effect onstimulating the vitality of the market, promoting technological innovation andespecially on providing plenty employment opportunities. SME financing in Chinahave some problems due to the self-problem and the external market environment,which lead to the restriction on its development. So how to solve the problemsexisted in the financing of SME is desperately imminent.This article first takes the analysis from three angles: Supportive policies fromthe government, the financial environment and legal environment. Then analysis thereasons for SME financing problems from four aspects including the informationasymmetry, the credit guarantee system, the costs of transaction and the financialsystem. At last, the author propose that SME should speed up the pace of its ownconstruction, especially focus on improving the credit guarantee system and trying toresolve the fund-raising obstacles in the form of funding alliance. And, at the sametime, SME should take the improved legal protection and the financial system as astrong backing to go on a healthy and orderly development.