Study On The Strategies For Commercial Banks To Solve The Financing Problem Of SME

In recent years, with the rapid development of China’s national economy, small and mediumenterprises have become a major component of China’s national economy. According to the latest statisticsof the Ministry of Industry and Information Technology, the number of SMEs in China has accounted for99%of the total enterprises,60%of the total economy, about50%of paid taxes in the overall state taxrevenue,80%of employment, and60%of the total import and export volume respectively. It is suggestedthat the sound or bad development of SMEs, to a certain extent, will influence national economy and socialstability.However, the governments and scholars at home or abroad have been plagued with the SMEsfinancial issues. The main factors restricting SMEs finance lie in the difficulties in financing and mortgageand high cost and risk. In recent years, the Chinese government have introduced a series of measures tosupport the development of SMEs. In particular,2011has witnessed that the new strategies for economiczone were released by the government. In the same year, our country has outlined the project of economiczone in the central part of China, which, undoubtedly, has guaranteed the economic development in thatarea and provided some significant theoretical and practical cases on the study of Bank of China (HenanBranch).This paper, from the microscopic perspective, proposes some recommendations for thedevelopment of SMEs in “Zhong yuan Economic Zone” in terms of the state-owned commercial bankdispositions. Besides, this paper draws on various theories, such as the theory of asymmetric information,the credit rationing theory, the theory of the financing structure, the “Macmillan Gap” theory and theeconomies of scale theory, to analyze the situations of the Bank of China (He nan Branch) supportingSMEs.This paper, from a part to a whole, conducts an empirical study, including comparative anddiachronic analysis, field research, and triangulation method(qualitative and quantitative research methods).This paper expands from several aspects. In the first place, this paper briefly outlines the current situationand reasons for the difficulties in financing of SMEs in China. it reviews the literature of financing onSMEs at home and abroad. describes the information asymmetry, financing structure theory, and critiques the relevant theories. Following this, this essay, in this data analysis section, adopts muti-dimensionalperspectives to analyze the collected data, such as comparative and diachronic analysis, triangulationmethod to validate the research. In particular, it is worth noting that the special features of SMEs in He nanProvince are imbedded in this research. In this regard, this paper is of practical significance when it comesto its research context. Lastly, this paper explores the large commercial banks on how to establish aninstitutional system to satisfy the needs of SMEs financing services. Aside from this, this paper proposessome solutions to the financing difficulties of SMEs in He nan Province, Bank of China. This paper may beused as a reference for the commercial banks in terms of the financing difficulties in SMEs in He nan ofChina.