Study On Bill Market Relieving SME’s Financing Constraints

Since the reform and opening up,China’s bill market has developed vigorously and reached the trillion level,which is an important part of China’s money market and closely related to the real economy.The difficulty of financing and the high cost of financing for SMEs(small and medium-sized enterprises)is a major long-term financial problem faced by China and the world,which hinders the healthy development of enterprises.Because of the low threshold and convenient circulation,bills have become one of the preferred methods for SMEs to finance.The mechanism and effect of the bill market on alleviating the financing constraints of SMEs is an issue worthy of in-depth exploration.This paper firstly focuses on the bill market’s current situation and SMEs’ finance situation.Then this paper studies the mechanism and effect of the Chinese bill market in mitigating the financing of SMEs based on relevant financing theories.This paper collects the data on 423 SMEs and the bill market from 2006 to 2020 and establishes a model for empirical research based on theoretical analysis,which finds that the development and activation of the bill market can reduce the cash flow sensitivity of cash for SMEs.The use of bills for payment and receipt of accounts among enterprises is equivalent to obtaining short-term financing,which reduces the need for enterprises to hold cash.Further analysis of the model shows that there are regional differences in the mitigation effect,with enterprises in eastern regions,where the bill market is more actively developed,enjoying more financing relief from the bill market.The role of the bill market also differs for enterprises with different equity characteristics.Among them,non-state-owned enterprises rely more on the bill market to alleviate financing constraints.Finally,according to the conclusions obtained from the theoretical and empirical analyses,this paper puts forward corresponding suggestions from various aspects to promote the healthy development of the bill market and better serve SMEs,to improve the situation of financing difficulties.