The Research On Strategy Of Chinese Commercial Banks To Promote The Financing Of Small And Medium Enterprises

With the current economic and social development,small and medium enterprises have occupied an increasingly important role in the global economy.However,being small sized and backwardly managed,small and medium enterprises are facing many difficult problems and conflicts during its growth among which financing is the top priority.90% Chinese small and medium enterprises,which account for 99% enterprises in China,have difficulty in financing due to internal reason and external reason.There are several aspects for the internal reason such as outdated enterprise operation,poor cash liquidity,irregular enterprise management and mortgage principle shortage.With respect to external reasons,government policy support and commercial bank's preference play a decisive role.Commercial banks usually choose those large enterprises with a better credit rating as their borrowing client.When taking small and medium enterprises as borrowing clients,commercial banks ask for a better price and offer a shorter tenor in return of the higher risk caused by poor credit rating of small and medium enterprises.Although small and medium enterprises have growing variety of funding sources,such as capital market and private lending,etc.,commercial banks are still their first choice for financing considering the funding cost and realizability.Meanwhile more and more commercial banks have realized that small and medium enterprises have become a new revenue growth point in strategy.But no matter in overall planning or actual execution,there is room for commercial banks to improve on lending business with small and medium enterprises.Commercial banks are badly in need of new ideas to develop lending business with small and medium enterprises to optimize asset structure and enhance risk control.This article tries to solve that mystery of what prevent small and medium enterprises from commercial banks' funding and find out new thoughts to help commercial banks develop lending business with small and medium enterprises.It is very important for national economy development in practical guidance and academic value.