Credit Risk Mitigation In The Application Of Small And Medium Enterprise Financing

China’s small and medium-sized enterprises are in are facing many problems, such as rising production costs, the shrinking of international market and elusive domestic market, lack of its own resources and so on. So, small and medium-sized enterprises have difficult to financing. October29,2010, China association of interbank market dealers issued the "bank market Credit Risk Mitigation pilot guidance ", from now on, our country began to use Credit Risk Mitigation Agreement and Credit Risk Mitigation Warrant to launch in the form of credit risk protection class derivatives, this symbolized our country launched a slow-release credit risk tool formally, and opens the credit derivatives of innovation practice. Credit Risk Mitigation can transfer credit risk and disperse the credit risk, so Credit Risk Mitigation can be used as a tool of financial institutions dedicated to manage credit. As Credit Risk Mitigation has been launched, can be from the perspective of credit derivatives, in small and medium-sized enterprise credit risk of Banks faced in practical situation, using Credit Risk Mitigation, put forward the new model to solve the problem of small and medium-sized enterprise’s loan problems.This article through the introduction of the Credit Risk Mitigation’s definition and operation principle, from the perspective of practice, in view of the small and medium-sized enterprise’s financing difficult problem, from two aspects of indirect financing and direct financing, elaborated Credit Risk Mitigation’s role on spreading risk, releasing capital and improving the scale of direct financing, demonstrated that Credit Risk Mitigation has important significance to solve the small and medium-sized enterprise financing problems.Through the analysis of role CRM in small and medium-sized enterprises’indirect and direct financing, we can see that CRM have play a role in small and medium-sized enterprises’financing. CRM in our country is still in its infancy. It’s laws, regulations is not perfect, with development of CRM market, CRM will play an increasingly important role in the financing of small and medium-sized enterprises.