SME Credit Business Under The Credit Guarantees Of H Bank Xi’an Branch

Since the reform and opening up, small and medium-size enterprises (SMEs) havewitnessed rapid development in China. They not only offer the market dynamic mechanism,but also play a significant role in creating social wealth, resolving unemployment andbuilding a harmonious society, which prove to be a major force of national economy.Nevertheless, financing difficulty has been impeding the development of SMEs. Suchphenomenon gets worse with the deterioration of macro-economic environment andconsequently becomes the main bottleneck for the sound development of SMEs.Creditguarantee company, the professional organization functioning as a credit guarantee for SMEs,lends its credit resources as well as prevents and controls credit risks with compensation forgaining economic and social benefits. However, guarantee organizations have pulled downthe whole industry’s credit level because of their poor management and non-standardoperation. Besides, the division of labor between guarantee companies and banks in theprocess of specific credit operation is not clear, and the collaborative model in risk sharinghas not been established, which leads to the fact that the business development ofbank-guarantee cooperation platform is confronted with difficulty and further damagesseverely the credit business development of SMEs under credit guarantee. Therefore, itappears quite urgent and necessary to discover the problems in this kind of credit businessdevelopment and put forward corresponding solutions.At present, commercial banks mainly ease the financing difficulty of SMEs by theemployment of credit guarantee. Take H Bank Xi’an Branch as an example, as to its SMEs’credit business, those under credit guarantee account for predominant proportion of all SMEs.It’s researched in the paper the status quo of SMEs’ credit business development under theguarantee of H Bank Xi’an Branch as well as the difficulties the business has been confrontedwith during its rapid development, and the relevant solutions are offered in the end.With methods like data analysis, exemplification and analogy, SMEs’ credit businessunder the guarantee of H Bank Xi’an Branch is studied. It’s also proposed that for breakingthrough the development bottleneck and achieving a rapid and healthy development of SMEs’credit business under the guarantee of this Branch, the following measures are required: firstly, proceeding from the actual condition of industrial chain, growth, corporate socialresponsibility and entrepreneurs’ social morality as well as financial ecological environment,the bank should build and improve a multidimensional appraisal system of SMEs; secondly,as the sound and sustained development of guarantee companies as well as their abundantcapital, strong compensatory ability and standardized management will efficiently enhancethe recognition of guarantee companies required by bank credit risk control, the bank shouldtake the initiative to strengthen the screening and evaluation of guarantee organizations aswell as the establishment of management system to maintain the healthy and sustainabledevelopment of credit risk guarantee platform; finally, the bank should constantly improveand elevate its management level as to the credit risk confronted by SMEs under guaranteecompanies, which contributes to reducing the probability of non-performing loans and lossloans on the one hand, and building a reasonable credit appraisal system for SMEs on theother hand.