Abstract Traditionally, people think that bank credit is not suitable for SMEs financing. Our studies suggest that two key problems should be solved. First is the position of the enterprise. Due to the impact of risk and return, the big banks are not suitable for offering loans to enterprises in the start-up period or recession, while companies in the growing stage or in the mature stage, with the development potential, should be the main service object of the bank. In addition, the information asymmetry between banks and enterprises hinders the bank loans to SMEs. If the SMEs credit system is not perfect and banks lack efficient technology, large banks are not supposed to offer loans directly to the SMEs. Instead, they should use information intermediaries, such as folk finance, small and medium-sized banks, and e-commerce platform, in order to improve the efficiency of bank loans and to alleviate the SMEs financing problem.
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Received: 13 May 2013
Published: 15 November 2013
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Corresponding Authors:
XU Junhui
E-mail: xsally@sina.com
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