A Study On Credit Re-Guarantee Of Risk Sharing Mechanism In Small And Medium Enterprises Of Fujian Province

Developing guarantee and re-guarantee businesses is an important way to solve the problem of hard financing of SMEs(Small and Medium Enterprises) and help them. After more than twenty years’ exploration and development, financing mode mainly focusing on guarantee agency and serving SMEs have begun to shape in our country. However, while making great contributions to our economic development, guarantee business has defects, such as low magnification, limited guarantee capacity, etc. In order to solve the above problems and develop guarantee system, re-guarantee business emerged. Since 2008, provinces in our country began to establish re-guarantee agency to form a re-guarantee system mainly on provincial level. Fujian SMEs Re-guarantee Company is established under such conditions. As the only one re-guarantee agency in Fujian, Fujian SMEs Re-guarantee Company has formed an unique mode of re-guarantee mode after five years’ development and practice. However, the mode still has defects such as unbalanced risk and return and unreasonable setting of re-guarantee rates in risk sharing.In view of the realities above, this paper takes Fujian SMEs Re-guarantee Company as example to do research on the obvious problems in risk sharing business. Studies on risk sharing modes at home and abroad with the application of empirical approaches which will provide reference to risk sharing mechanism of re-guarantee agency in Fujian. It makes a price on the particular proportional hazard re-guarantee with the application of Monte Carlo Simulation of the Option Pricing Theory and evaluates on the access criterion of the guarantee agency and guaranteed enterprises with the application of Analytic Hierarchy Process.The main conclusions show as follows: First, the re-guarantee business rates of Fujian Re-guarantee Company are underpaid seriously and reasonable rates should be made under quantitative analyses. Second, internally, re-guarantee agency ought to manage the risk of re-guarantee business through completing the access mechanism of re-guarantee to make sure the re-guarantee agency operates properly. Third, in order to improve re-guarantee, actions should be done including carry out bank risk sharing, perfect the legal system and establish encourage mechanism or financial mechanism, etc.