EU SME Financing System

In most countries of the world, SMEs play an important role in the national economy, and they are the driving force of promoting economic development and social stability, and leading scientific and technological progress as well. However, the development of SMEs is always facing with a constraint of bottleneck, that is financing difficulty. Most governments around the world having been aware of the importance of SMEs, and have put the SME supporting policy to the height of the national level, so as to help SMEs to access to financing with more convenience.The EU is one of the most important advanced economies in the world, and SMEs in the EU economy also play an important role. The Support policies for SMEs of EU are more systematic and improve all levels of the different agencies for different aspects of SME financing. The EU venture capital market also provides a variety of means of SME financing, especially when the traditional financing methods can not effectively work.Germany’s financial system is bank-oriented, and the universal bank system and Hausbank provide a favorable financing environment for SMEs bank borrowing. At the same time, Germany’s venture financing platforms are more developed, including mezzanine and securitization. In particular, its SME credit guarantee system is critical for solving the difficulties of SME financing.This paper starts from the theory and definition of SME, and follows the details of the EU SME financing system and financing situation, and looks insight into the EU policy for supporting SME financing. Also it contains the detailed information of Germany SME financing system, and makes a comprehensive analysis focusing on Germany’s venture financial market for SME financing, particularly the credit guarantee system. Finally, on the base of the current situation and existing problems of SME financing in China, it summarizes the useful experience and important enlightenment.