A Study On The Mechanism Of Shadow Banking Promoting Financing Of Small And Medium-Sized Enterprises

SMEs are the main force of China’s real economy, and financing problem has always been the bottleneck for the development of SMEs. In terms of financing structure, the small and medium-sized enterprises in our country mainly rely on internal financing, and bank loan is the main source of funds. However, it is difficult for SMEs to obtain loans from banks and other traditional financial institutions because of their insufficient assets, untransparent financial information and low credit level. In recent years, shadow banking in China is developing rapidly. Its flexible management, diversified business forms, lower loan threshold as well as easy access to enterprise "soft information" make it attached to the small and medium-sized enterprise loan demand characteristics, and more and more small and medium-sized enterprise turn to shadow banking to seek funding support. The financing difficulty of small and mediumsized enterprises is the motivation of the development of China’s shadow banking system, and the development of China’s shadow banking system also provides a new way to solve the financing problems of small and medium enterprises.On the basis of the researches for shadow banking system and the financing of small and medium-sized enterprises at home and abroad, this thesis analyzes the matching between shadow banking and financing of SMEs using the credit rationing theory, financial growth cycle theory and the theory of financial repression. The influence of shadow bank development on financing for small and medium-sized enterprises is explained in both macroscopic and microcosmic ways — that is the development of shadow banking will increase the loan supply and market liquidity at the macro level, but also can improve the credit market capital price which would increase the cost of financing for small businesses. In terms of micro level, development of shadow bank can broaden financing channels, improve mode of financing, optimize the financing structure for SMEs. The empirical analysis in the thesis firstly applied the logit regression model to construct an index called Average Financial Constraint Index for measuring the degree of SME financial constraints. Then use the VAR model to analyse impulse response between the scale of shadow bank, the degree of economic boom, and the degree of financial constraints for the SMEs. Thus draws the conclusion: the development of the shadow bank can reduce the financial constraints of SMEs, improve the degree of prosperity of the entity economy, and the increase of SME financial constraints will promote the development of the shadow banking in the short term, which further confirmed the above theoretical analysis. Finally, some related problems of shadow banking, small and medium-sized enterprises as well as regulatory authorities are proposed: in terms of shadow banking, the loan interest rates are relatively high, loan process reflected as easy to lead to risk; in terms of SMEs, credit information is insufficient, and disclosure of information is not standardized; in terms of government regulation, regulatory performance lacks the unified credit information platform, and the agencies and business of the shadow banking system is in the lack of supervision. Based on the analysis above, some solutions are proposed to strengthen positive effect of shadow bank on financing of small and medium enterprises.