Can Internet Finance Relieve The Difficulty Of SMEs’ Financing?

Whether in the developed countries or the developing ones,SMEs are the fundamental of the national economy,playing an indispensable and irreplaceable role in promoting economic growth,employment,technological progress,and expanding exports.However,the development of SMEs is still faced with many uncertainties,challenges and difficulties.For instance,financing difficulty is one of the most thorny troubles.Due to the lack of strong enterprise competition,information asymmetry,and macro-financial suppression,etc.,the financing difficulty faced by SMEs is still quite troubling in China.In 2017,a survey by the National Bureau of Statistics showed that 38.8%of SMEs reflected their financing needs cannot be met,reminding us alleviate the financing difficulty of SMEs is no time to delay.As a new financial model,Internet Finance,with the aid of advanced Fintech,now has a fairly complete finance content,playing a significant role in improving information asymmetry,cutting transaction costs,optimizing resource allocation,reducing market risks,etc.,and which has a great potential for alleviating the financing difficulty of the SMEs.Therefore,based on the theory of "long-tail theory" and CAPM model,etc.,the paper uses mathematical formulas and economics graphs to present the theoretical mechanism,through improving information asymmetry,controlling risk costs,and increasing financial supply,of internet finance relieving SMEs’ financing difficulty.Furthermore,the author has selected several related variables,such as the variable of SMEs’financing capacity,two proxy variables relevant to the development of Internet Finance,etc.,to conduct Empirical Research,which shows that Internet Finance can improve the financing environment for SMEs by improving information asymmetry,controlling risk costs,and increasing financial supply,thereby alleviating the problem of financing difficulties for SMEs.Finally,through the work of the paper,the author puts forward some practical suggestions on how to develop Internet Finance and perfect the financing of SMEs,like facilitating the sharing of social information,implementing flexible supervision,and strictly controlling the boundaries of system security.The paper was divided into five chapters:Chapter 1 introduced the research objects and significance of the paper,planned research methods,work contributions,the deficiencies of the paper and further possible works.Chapter 2,in view of the research plan,summarized the relevant literatures.Chapter 3 studied the phenomenon of SMEs’ financing difficulty and its root causes,the advantages and the theoretical mechanisms of Internet Finance relieving SMEs’ financing difficulty.Based on the theories of Chapter 3,Chapter 4 empirically tested whether the development of Internet Finance could improve the financing environment for SMEs,thus alleviating SMEs’ financing difficulty.Chapter 5 summarized the research results of the paper,and made four relevant recommendations.