The Study On The Cost-benefit Of SMEs’Financial Bonds Issued By Commercial Banks

Small micro-enterprise financial bonds, which are issued by commercial banks, are used to raise special funds for the loans to small and micro enterprises (Hereinafter abbreviated as SMEs’). It’s new financing instruments to increase sources of loan funds and optimize micro-finance services for SMEs’.With the introduction of the issued policy, SMEs’ financial bonds were immediately soughed by the medium and small commercial banks. By the end of2013, there have been34banks to issue53SMEs’ financial bonds, the total size of has reached306billion Yuan. Under the condition that commercial banks are not positive for SMEs’ loans, it’s worth studying and discussing that whether issuing SMEs’ financial bonds can arouse the enthusiasm of the commercial bank lending for SMEs and bring additional revenue to the commercial bank.As rational economic man, commercial banks based on a comprehensive cost-benefit considerations to make the decision of whether to issue bonds.This paper verifies the SMEs’ financial bonds issuance costs is affected by many factors through empirical analysis, Including the bond credit rating, size, maturity, the bank nature and size. By issuing SMEs’ financial bonds, commercial banks gain more than expanding the funding sources SMEs’ loans, improving the proportion of SMEs’ loans and changing the operating liabilities structure. However, the main driver to prompt commercial banks issuing bonds is the preferential policy commitment by rregulatory authorities. Through issuing SMEs’ financial bonds, commercial banks can improve asset liquidity, and ease loan ratio and capital adequacy stress. The same time, for commercial banks, issuing SMEs’ financial bonds also played the role of market discipline to commercial banks running, curbed irrational exuberance to private lending, supplied financing function to bond market and limited regulatory control behavior.At present, the commercial bank issue loans to SMEs’ mainly include deposit funding sources and distribution of SMEs’ financial bonds, and so on. Commercial banks make net income maximization as the selection criteria for financing. In the commercial bank deposits of risk aversion increases, SMEs’ loans to the rising cost of revenue decreased sensitivity of the situation, commercial banks can maximize net gains realized through the issuance of SMEs’ financial bonds. But commercial banks can hardly put benefits of issuing SMEs’ financial bonds into practice, because SMEs’ loans are granted credit blindly, issuing specialized SMEs’loans takes up all commercial banks loans and SMEs’financial bonds does not change the financing of SMEs’ loans. In order to maximize the benefits of issuing SMEs’ financial bonds, commercial banks should improve the ability of risk management, the supervision department should strengthen the control over the fund flow and the authority should optimize the financing environment of SMEs’ financial bonds constantly. As far as commercial banks, when the benefits coming from using SMEs’ financial bonds fund raising to issuing SMEs’loans are more than those from using depositing to issue SMEs’loans under the circumstance that deposit-taking pressure is increasing and benefits of issuing SMEs’ loans are decreasing sensitivity to cost of fund, they will make the decision of issuing SMEs’financial bonds.