How to solve the problem of SME bank loans?

Perfect the credit system of small and medium-sized enterprises and eliminate the information asymmetry between the two sides of the loan. First of all to explore and establish our country’s credit policy and development, gradually increase the credit market supervision especially for small and medium-sized enterprises credit rating business, to unify the central and local governments at all levels of supervision standards for small and medium-sized enterprises, finally gradually standardized credit system. Secondly, efforts should be made to promote the pilot work of SME credit system, and strive to build a complete SME credit system, improve the credit system. You can try to start from the local governments at all levels, personal information center database and the management of Create Company in many financial institutions under the cooperation of financial institutions, the government will get the data results of cooperation and sharing. Finally, it is necessary to strengthen the legislative strength of the credit reporting system.
The causes of financing difficulties for small and medium sized enterprises in China
In developed countries or developing countries, small and medium-sized enterprises are an important pillar of the country’s economic development. Since China’s reform and opening to the outside world, some small and medium-sized enterprises in China have made great progress. SMEs have become the driving force of China’s economic growth. However, the financing of SMEs in China is still in its infancy, and the analysis of the financing of SMEs is far below the needs of small and medium-sized entrepreneurs, affecting the survival and development of these enterprises.
Improve the security system for small and medium enterprises. First, create a financing guarantee system for small and medium enterprises around the government. Secondly, it is necessary to establish a feasible guarantee institution in the market economy. In this process, the banking and banking supervision departments should work closely with other relevant departments, and strive to achieve a healthy development of the entire security industry. Finally, we should draw on other countries’ experiences and methods to solve similar problems. In the United States, for example, the financing difficulties of SMEs have been overcome by the establishment of NASDAQ and the rise of venture investment.
Efforts to develop small and medium banks. Because small and medium-sized banks are usually small financial organizations of local scale, they have greater advantages in the financing of local smes. Because it is located in the city with a smaller range of local, small and medium-sized banks and small and medium-sized enterprises close cooperation relationship between each other, more understanding, which is conducive to solve the problem of information asymmetry between the two sides of the transaction in the lending process. Therefore, small and medium-sized banks have a greater voice in the management of small and medium-sized enterprises and financial performance.
Small and medium-sized enterprises, bank financing, difficulties, solutions
Gradually improve the financing environment for smes. In order to solve the financing difficulties of small and medium-sized enterprises, first of all, is the need to improve the financing environment for SMEs, for SMEs to establish a perfect financing environment is the common goal of developed countries and developing countries. To establish a good financing environment, the first thing to perfect is the information environment of smes. As China’s economy in the transition period, the society for small and medium-sized enterprise information has not been fully understood, the evaluation of enterprise credit system and the credit system is not perfect, and the banks are short of related information collection and personnel incentives, which makes the development and management of information of small and medium-sized enterprises serious shortage, so, investment banks and other financial institutions the business will be reserved. Moreover, the development of some intermediary institutions that can be used for asset credit investigation and rating is also essential for SMEs financing. In some developed countries, there are many for-profit private institutions, these institutions specialized in small and medium-sized enterprises to collect credit, business, financial and other aspects of the situation, after the information obtained to some engaged in investment banking and financial institutions to obtain profits from. In fact, the industry in the United States has become a relatively large and mature emerging industries, has 22 thousand employees, with annual sales of $2 billion 800 million. At present, the lack of professional credit rating agencies in our country, and the lack of a series of international credit rating theory and methods, which makes SMEs in the financing process become more passive and difficult.
Services such as banks and other financial institutions are not in place. First, the comprehensive cost of loans needed to improve. Under the current situation, many small and medium-sized enterprises reflect the bank lending organizations require companies to provide property insurance for the required amount of loans in the total loan amount of about 0.2%~0.3%, accident insurance and senior managers, the amount of collateral in the amount of about 0.2% or so, there are some other related costs, make the enterprise loan cost is much higher than the nominal the cost of the loan interest rate. Two, banks are paying too much attention to the mortgage in the credit conditions for smes. According to the people’s Bank of investigation, in small and medium enterprises loans, mortgages and other related real estate mortgage accounted for 59.5%, the proportion of credit is only about 9.8%. At the same time, the mortgage ratio of production factors, such as buildings, is lower, usually only about 30%~50%.

Bank innovation in credit operations. As a result of the planned economic system undertaken by our economy, most of the financial institutions aim at serving large and medium-sized state-owned enterprises rather than small and medium sized enterprises. Therefore, it is necessary to innovate the credit institutions of financial institutions to match the credit business required by SMEs so as to meet the loan characteristics of smes. First of all, credit technology should be innovated. At present, banks in China generally adopt some loan patterns which require higher information and mortgage guarantees, and require hard indicators (such as financial statements and mortgage guarantees). The threshold conditions of this loan model are very high for SMEs, because the information of SMEs is relatively opaque, and the credit guarantee system of SMEs has not yet been established. Therefore, China’s banks should aim at the characteristics of SME loans to make targeted lending policy reform, so as to enable SMEs to maximize demand for loans.
There are many problems in smes. A management system is not perfect, usually small and medium-sized enterprise management system as a family or personal management mode, which will obviously increase the risk of investment in small and medium sized enterprises, because of the lack of restraint mechanism of scientific management system; two channels of financing is less, the lack of long-term development planning, inadequate investment in scientific research, product competitiveness is low.
Information asymmetry between the two sides of financing. Asymmetric information refers to the degree to which the two sides of the transaction have different information on the transaction, which makes the lack of information in the trading process at a disadvantage position. As a general rule, the seller has a higher grasp of commodity information than buyers. In this analysis, in the financial markets, the borrower has an advantage over the lender in terms of the level of success and rate of return on a project. In this case of asymmetric information, adverse selection and moral hazard are prone to occur.
The economic environment of our country is not perfect. One is the unsound social credit system. At present, although the people’s Bank has established enterprise credit reporting system, however, it is difficult to accurately judge the credit status of SMEs according to the indicators in the system. Two is the social credit guarantee operation is not standard. The focus is as follows: the percentage of risk sharing is not coordinated; the support provided by insurance institutions is not in place; some banks do not recognize small and medium-sized Guarantee corporation. Three is incomplete laws and regulations. A series of laws and regulations aiming at the financing difficulties of small and medium-sized enterprises do not form a complete system for solving the financing difficulties of small and medium-sized enterprises, and even some policies have the opposite effect.
Secondly, we should innovate the mortgage method. Because of small and medium sized companies in the small scale of production, the company accumulated amount of fixed assets will not be too much, some plant and machinery and other real estate or even by way of lease term gain, not as collateral for a loan. Compared with the popular Liquidity Guarantee in the international community, the mortgage mode of most banks in our country is still the mortgage of real estate. This guarantee method greatly improves the loan difficulty of small and medium-sized enterprises. In foreign chattel mortgage has become a trend, and formed a complete set of mature theory and mode of operation, some inventory and accounts receivable and intellectual property can become the current assets mortgage, these measures provide a broad space for the development of small and medium sized enterprises.
Loan audit period is longer, many medium and long-term loans are difficult to approval. At present, the audit period of the loan extends from the original 3~10 days to 15~30 days after 2007.

Original article, reprinted please note: ReprintLOAN

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