Abstract: At present, China's small and medium-sized enterprises have become one of the most competitive economic forces. However, the financing difficulties faced by SMEs have become a bottleneck restricting their development. This paper analyzes the causes of financing difficulties of small and medium-sized enterprises and proposes measures to solve them.
Keywords: small and medium-sized enterprises, financing, countermeasures
Since the reform and opening up, small and medium-sized enterprises in China have developed rapidly. By the end of October 2006, the number of SMEs in China has reached more than 42 million, accounting for 99.8% of the total number of enterprises in the country. The number of SMEs registered by the industry and commerce department has reached more than 4.3 million, and the number of self-employed households has reached more than 38 million. The value of final products and services created by small and medium-sized enterprises accounts for 58 per cent of the gross domestic product (GDP), the commodities they produce account for 59 per cent of social sales, and the taxes they pay account for 50.2 per cent. Small and medium-sized enterprises have become an important foundation for ensuring China's economic development, market prosperity and the realization of employment, and continue to be an important force in promoting changes in China's economic system with their flexible operating mechanisms and market resilience. However, China's SMEs are still facing many problems in their development, prominent among which is the problem of financing. Financing difficulties cause the lack of funds for China's small and medium-sized enterprises, which seriously restricts the entrepreneurship and sustainable development of small and medium-sized enterprises, and then affects the healthy development of China's economy. Therefore, an in-depth understanding of the causes of financing difficulties of small and medium-sized enterprises, and find ways to solve the problem has become an urgent task.
I, the current situation of financing difficulties of small and medium-sized enterprises
Generally speaking, the financing channels of small and medium-sized enterprises are mainly two: one is the endogenous financing, including the owner's own funds, the funds borrowed from friends and relatives, risky investment and funds accumulated after the opening of the enterprise and other sources; the second is the exogenous financing, which can be divided into two forms of indirect financing and direct financing: Indirect financing refers to the bank, Indirect financing refers to the financing intermediated by banks, credit unions and other financial institutions, including a variety of short-term loans, medium- and long-term loans, etc.; direct financing refers to the form of stocks and bonds to publicly raise funds from the community as well as through the leasing company to deal with financial leasing to finance the way to finance the funds.
(I) Changes in Financing Channels
Most of the small and medium-sized enterprises are developed by self-accumulation and self-financing, and endogenous financing accounts for a higher proportion. However, with the development of enterprises, purely endogenous financing can no longer meet the needs of enterprise development, and the degree of reliance on exogenous financing increases. As the operating scale of China's small and medium-sized enterprises is generally small, generally unable to enter the stock market or debt market for direct financing, and China's industrial funds, venture capital and so on are still in their infancy, so China's small and medium-sized enterprises are now basically relying on the indirect financing from financial institutions, such as banks, for both liquidity and the financing of investment in fixed assets.
(2) financing costs
According to reports, the current commercial banks on small and medium-sized loan interest rates generally up 20%? 30%, plus registration fees, appraisal fees, notary fees, guarantee fees, etc., it is estimated that the total cost of financing small and medium-sized as high as 12%, compared with the medium and large advantage of the cost of the loans of enterprises is higher than the cost of one to several times. Industry insiders point out that such a heavy cost of capital means that the enterprise's capital margins to reach at least 12% in order not to lose money, while China's average industrial profit margins can reach 12% of the industry is very little.
(C) small and medium-sized enterprises to obtain less bank credit support
According to statistics, the current scale of small and medium-sized enterprises accounted for only about 10% of the total amount of bank credit, the country's township and village enterprises, individually owned private enterprises, "three-funded" short-term loans accounted for only 14.4% of the bank's short-term loans. It can be seen that China's small and medium-sized enterprises have received very little credit support from banks, which is extremely disproportionate to the fact that the value of final products and services created by small and medium-sized enterprises accounts for 58 per cent of the gross domestic product (GDP), that the commodities they produce account for 59 per cent of social sales, and that the taxes they pay account for 50.2 per cent of the GDP. The shortage of capital is a serious constraint on the development of SMEs.
Two, SMEs financing difficulties in the analysis of the reasons
SMEs financing difficulties are due to no more than the following two aspects, on the one hand, the SMEs themselves have problems or due to the lack of internal conditions, resulting in loan financing difficulties; on the other hand, the external environment and the role of SMEs caused by the loan financing difficulties.
(a) internal conditions lead to the causes of small and medium-sized enterprises financing difficulties
1. At present, the problems of small and medium-sized enterprises are more prominent, small and medium-sized enterprises, small scale operation, low level of management, financial capacity is weak, the potential risk, but also the existence of poor technical level, market information is not good and other problems, the difficulty of choosing the right project, the bank loan investment is neither economic and risky. 2. Due to many small and medium-sized enterprises serious duplication of construction, chaotic management, lack of market competitiveness, thus seriously affecting the issuance of commercial bank loans.3. The contract consciousness, performance level and integrity of business leaders is very weak, malicious debt, the phenomenon of transferring risks from time to time, a small number of enterprises to evade or overhanging bank loans, the high rate of non-performing financing exacerbated the financial institutions of the The high rate of non-performing loans has aggravated the "loan-shy mentality" of financial institutions, affecting the confidence of credit investment.4. From the viewpoint of enterprise indebtedness and profitability, SMEs' indebtedness is on the high side as a whole, and their profitability is low.5. Difficulty in secured lending. SMEs have fewer assets of their own, even fewer collaterals, and the discount rate of collaterals is high. Moreover, the bank mortgage security assessment and registration departments scattered, cumbersome procedures, assessment of intermediary services are not standardized, the assessment of collateral is often not accurately assessed in accordance with market behavior, arbitrariness, and higher costs, resulting in difficulties in the enterprise mortgage loans.
(B) the external environment causes the causes of financing difficulties for small and medium-sized enterprises
1. From the bank
(1) China's commercial banks have increased the monitoring of non-performing assets and accountability. In practice, loans to government-supported large enterprises, large projects, both the loan problems, but also easy to reason from the moral hazard, to avoid or reduce the responsibility, but if the loan to small and medium-sized enterprises, especially private enterprises, but it is often not easy to reason from the moral hazard, easy to be reviewed and punished. In addition, the General Rules for Loans to Commercial Banks stipulate very stringent conditions for loans, and many SMEs are denied loans because they fail to meet the required conditions. Therefore, the strictness of loan access and regulation makes banks cautious in lending to SMEs. (2) Safety, liquidity and profitability are the basic requirements for bank loans, while SMEs have excessive business risks, making it naturally difficult for banks to strengthen their loan support for SMEs. Research at home and abroad shows that SMEs have a high failure rate. For example, in the United States, within two years of the establishment of small and medium-sized enterprises, 23.7% of the failure, within four years of 51.7% of the failure, within six years of 62.7% of the failure. As small and medium-sized enterprises have a high failure rate, the loans to small and medium-sized enterprises is bound to be high-risk, which is not in line with the principle of sound bank operations, with the administrative order to force the bank to small and medium-sized enterprise loans will further increase the bank's business risk, the loss is not worth the gain. (3) Due to the existence of "errand costs", small businesses can only find financial services within a relatively short distance, which determines the financial institutions serving small businesses must have more branches, and the establishment of financial institutions specializing in providing financial support for small and medium-sized enterprises there are financing, information collection, strengthening supervision and other aspects of the many difficulties. The establishment of financial institutions specializing in providing financial support for SMEs involves many difficulties in terms of fund-raising, information collection and enhanced supervision. (4) The entry threshold for loans to small and medium-sized enterprises is too high, and the design of loan methods is single and the procedures are complicated. Moreover, there are many legal obstacles to the issuance of microcredit, mainly in the form of excessive focus on collateral, collateral and third-party guarantees, while ignoring the borrower's own cash flow, the first ability to repay the examination.
2. From the government's side:
(1) The lack of supporting legal policies makes financing for small and medium-sized enterprises more difficult. China has not legally recognized the relatively special status of small and medium-sized enterprises. SMEs need specialized national legislation to safeguard their interests, identify aspects and areas of support for SMEs, and at the same time provide a legal basis for financial institutions to serve SMEs. The current Law of the People's Republic of China on the Promotion of Small and Medium-sized Enterprises and the Opinions of the State Council on Encouraging, Supporting and Guiding the Development of the Individual, Private and Other Non-public Economies still lack supporting laws and regulations, and have not yet formed an effective legal system. (2) In the state's management and assessment of commercial banks, there are no systems and norms specifically designed to serve small and medium-sized enterprises, and there is no differentiation between corporate clients according to large and small, but rather a generalized treatment of large and small enterprises. Therefore, commercial banks naturally favor large enterprises.
3. From the capital market
At present, China's capital market is still very imperfect, most enterprises, especially small and medium-sized enterprises are difficult to obtain the required funds through direct financing channels. (1) from the equity financing point of view, the only market for enterprises to issue shares listed on the stock exchange have set a very high threshold, by no means the general small and medium-sized enterprises can ask for. (2) At present, the development of China's corporate bond market lags far behind the development of the stock market, large enterprises are difficult to finance through the issuance of bonds, small-scale, relatively poor credit rating of small and medium-sized enterprises on
not to mention. However, even if the bond market develops in the future, those who can enter the bond market to raise funds are limited to large enterprises and some SMEs that have the conditions to issue bonds.
Three, to solve China's small and medium-sized enterprises financing difficulties in countermeasures
The author believes that the countermeasures to solve the problem of financing small and medium-sized enterprises is the enhancement of the enterprise's ability and the creation of the external environment of the enterprise. Specifically include the following aspects:
(a) for small and medium-sized enterprises, to strengthen their own development and enhance their inherent financing capacity
1. small and medium-sized enterprises should change the business mechanism through reform, optimize the enterprise structure through reorganization, enhance the strength of the enterprise through renovation, and at the same time, guide the enterprise to strengthen the management of the market-oriented, to establish a sense of competition, and accelerate the enterprise technological transformation and product renewal. 2. 2. Strengthen the concept of credit, and build a good relationship between banks and enterprises. Small and medium-sized enterprises must strengthen the sense of credit, protect the bank's debt, pay back the capital and interest on time, negotiate with the bank to solve the difficulties, and establish a good relationship between the bank and the enterprise, so as to create conditions for enterprise financing. In addition to establishing a standardized property rights system, SMEs must also establish an effective financial system adapted to the legal status of the enterprise, and improve the level of credit and credit quality.
(2) for financial institutions, we must conscientiously implement the relevant state laws, improve financial services
"The Chinese people *** and the state small and medium-sized enterprise promotion law," article 15 provides: "financial institutions should provide financial support for small and medium-sized enterprises, and strive to improve financial services, change the style of service, enhance the awareness of the service, and improve the quality of service. Commercial banks and credit unions shall improve their credit management, expand their service areas, develop financial products adapted to the development of small and medium-sized enterprises, adjust their credit structure, and provide small and medium-sized enterprises with services in the areas of credit, settlement, financial counseling and investment management. State policy financial institutions should, within the scope of their business operations, take various forms to provide financial services for SMEs". Financial institutions are the main channel of financing for SMEs, and financial institutions are duty-bound to improve the problem of financing difficulties of SMEs. 1. Loan financing for large enterprises and SMEs should be treated equally and fairly, and the cost of financing for SMEs should be lowered through improving efficiency, and the interest rate for SMEs should be controlled as far as possible to alleviate the pressure of SMEs in repaying their loans. 2. Establish incentive and constraint mechanisms and bank-enterprise cooperation mechanisms for issuing loans to SMEs. 3. The company has established a mechanism of incentives, constraints and direct information channels for cooperation between banks and enterprises, improved the financing and credit files of small and medium-sized enterprises, and strengthened the internal supervision of finance to ensure that the investment of funds is reasonable.
(3) The government should formulate corresponding policies to solve the problem of financing difficulties of small and medium-sized enterprises
1. Relax the access control and set up more commercial financial institutions appropriately. On the one hand, private capital should be allowed to form commercial banks in accordance with the standards; on the other hand, we should speed up the restructuring of urban cooperative banks and urban and rural credit cooperatives, and give full play to the advantages of these regional banks that are more familiar with the local economic situation, so as to provide financing services for the small and medium-sized enterprises.2. Giving full play to the role of financial leasing institutions, for small and medium-sized enterprises, financial leasing is a particularly effective means of financing. At present in some countries, the financial leasing industry has been quite developed, the United States enterprise equipment investment 1/3 is through financial leasing. But in China, the development of the financial leasing industry is still subject to the limitations of many factors, the development is very slow, the entire industry is small, the various types of leasing company's business activities are not standardized.