Relationship-based loans are small and medium enterprises in Hainan Province to crack an effective way of financing

Abstract: The economic Development of SMEs as an important part of the industrial output and employment contribution rates are high, but Hainan financing problem of SMEs is still more obvious. In this paper, the relevant domestic and foreign financing of SMEs theory, analysis of Hainan Province, the status of financing of SMEs in this basis, propose solutions to small and medium enterprises in Hainan Province is an effective way of financing the implementation of relationship-based loans, and to implement programs and relational loans made specific exit mechanism Suggestions.

Keywords: SMEs, information asymmetry, relational loans


First, the relationship between the type of loans and the basic theory of meaning

Relationship-based lending refers to bank borrowing by companies and long-term exposure to a variety of channels, has accumulated a large number of business owners and related enterprises and private information and private information mainly based on these loans. Banks to extend loans to major relational basis for decision making is its accumulated on the borrower's private information enterprises and their owners, not the company can provide full collateral or financial statements of qualified information such private information is usually reflect the special risks of "soft information" such as business owners conduct and behavior of enterprises, and reputation, can not be obtained through open market channels, but mainly through bank loan officer and business owners a variety of channels of contact between the bank or through a variety of services to provide enterprises with access, as well as some soft information is through a bank loan officer where the business community and business stakeholders (such as suppliers, customers, employees, etc.) visit to obtain. between the lender and the borrower's long-term exposure to help the lender to collect on the Development prospects of the borrower and loan the probability of repayment and other information, then it is to make the loan decision-making facilitated. relational lending main purpose is to establish long-term relationship between banks, to eliminate the risks of asymmetric information. enterprises and financial institutions conducive to long-term relationship lower interest costs, along with small and medium financial institutions and SMEs long-term cooperation relationship between the soft information into the bank's unique advantages, this information will help banks to determine lending rates and the post-supervision, to resolve the credit of the adverse selection and moral hazard.

Relational financing in the 1990s caused by the practice of economics and business management theory seriously in foreign countries, Petersen and Rajan (1994) used by the Fed and the U.S. Small Business Administration co-sponsored, funded status of small business loans on the three surveys (ie, the "National Small Business Finance Survey") of the data found that for small businesses, financial institutions and the existence of a close relationship will enhance the availability of its financing, and this can slightly reduce its borrowing costs. They also found that in more concentrated credit markets, lenders more inclined to provide more loans to borrowers, and interest rates low, the reason is that in which the borrower's credit markets with more concentration of characteristics, the more lenders and borrowers to ensure that the relationship to persistence Ⅲ. in the relationship-based financing, the bank is seeking to maximize long-term benefits rather than short-term effects.


Second, Hainan Province, the status of financing for SMEs

(A) lack of bank lending to SMEs
Hainan Province, from commercial banks credit situation, emphasis on big business phenomenon is very prominent .2007 end, the province's balance of 44.185 billion yuan bank loans to SMEs, accounting for 36.0% of the province's total loans, the year 2007, all Province, the amount of 7.93 billion yuan loans to SMEs occurs, the total amount of loans reached 37.4% occurred from the perspective of township enterprises, township enterprises accounted for loans to total loans ratio is not high, and showed a downward trend, the lowest in 2005, Despite the better after, but the proportion is still less than 1%, especially since the financial crisis, households and SMEs credit loans are not optimistic, at December 31, 2008 Statistics of small business credit conditions, the number of households fell 5790, the loan balance down 2.24621 billion yuan.

(B) a single financing channels for SMEs
Although SMEs can be stocks, bonds, fund raising and financing of private lending, etc., but more limited, Hainan Province, direct financing for SMEs is very difficult, is still the main source of funding in May 2004 when bank loans. Our specially created for small and medium provide direct financing of enterprises listed on the Shenzhen SME board platform, but so far Hainan is still not a company to enter the city of Hainan Province .2005 Corps survey of 300 small and medium enterprises in Hainan Province sample survey showed that 72.7% of the companies funding gap exists , of which only 33.7% of the enterprises to obtain financing through various channels, as well as 39.0% of companies unable to obtain funding in the financing, 66% of the enterprises first select the way of bank loans, only 0.3% of the enterprises through public issuance of shares, bonds, notes and other financial instruments in the financial market financing.

(C) for SMEs small number of financial institutions
Small and medium commercial banks, only China Everbright Bank and Shenzhen Development Bank, China Everbright Bank in 2006 and the Shenzhen Development Bank were only a few branches and four in 2007, the two branches of a few joint-stock banks were only six and four. four state-owned commercial banks in the commercial process, constantly on the settlement institution. basically out of the grass-roots network of county and township agencies and communities. and township enterprises play an important role in the number of rural credit cooperatives has been dropped from the year 2000. Small lack of the number of lenders and only Qionghai Grameen rural credit cooperatives, and several other projects and Qiongzhong micro-credit programs because of financial industry consolidation caused by bank lending decision-making level is generally on the move, based on hard information and marketing collateral transactional bank loans become the mainstream of corporate loans. coupled with the credit guarantee system has not been completed. the result is that credit funds to focus on large enterprises and projects, loans to SMEs face serious difficulties.

(D) inadequate external audits of SMEs, resulting in lower credit ratings
Although <<Hainan credit management and credit assessment of the Interim Provisions>> Back in late 2005 had been introduced, but many SMEs do not participate in the credit assessment on the one hand, credit rating due to lack of awareness of enterprises, did not realize its importance, that the business of personal privacy on the other hand, due to disclosure of information for SMEs and large companies to go through the same procedure. the higher unit cost of the audit, leading to small and medium enterprises with low credit ratings, bank loans increased transaction costs, making many companies are bank to give loans.

(E) SMEs lack collateral for the property, it is difficult to obtain loans
In the Development and entrepreneurship in SMEs usually do not have large asset size, and do not have a good track record and operating history of recognized guarantees and mortgage banking, credit ratings in general can not obtain a higher credit rating is currently in business the authenticity of the financial statements of moral credit for the premise has not been established, is difficult for SMEs to meet the bank's asset size, financial condition and credit history requirements. banks to secure loans, but to reduce the proportion of credit loans, mortgages and secured loans to increase the proportion of However, SMEs generally have a small-scale, less fixed assets, property characteristics such as lack of collateral, providing a certain kind of quantity and quality of collateral for loans more difficult, so many small and medium enterprises only through non-formal financial or borrowing a friend access to finance.


Third, the use of relationship-based loans and Hainan Province, the advantages of financing SMEs

(A) loans to help improve the relationship between the type of availability of loans to SMEs
SME financing in the settlement process of asymmetric information problems, as opposed to transaction-based loans, the loans had a natural relationship between the type of information superiority. Relational loans mainly concentrated in specific areas, through long-term relationship, relationship banking on the SMEs in the region to become familiar with operations and financial condition, may have other financial institutions do not have or only have information only through the high cost, such as the borrower's character, reputation, personality characteristics, family composition, family history, market, products, living expenses and related business decisions and many important, non-public information such as soft, in large part can replace the hard financial data and other information, will help reduce the shortage of qualified SMEs to financial information and physical collateral and by financing constraints with local businesses and communities with close ties between the long-term accumulation of information of information issuing relational opaque SMEs loans, can effectively alleviate the difficulties faced by the SMEs.

(B) soft information more quickly to help commercial banks, making
Unlike transactional relational loans easy to obtain loans as dependent, easily quantifiable, easy verification of the "hard information" (such as enterprise asset collateral, the financial statements of information, etc.), they lend more flexibility on given the weight of financial ratios smaller, more focused through the access to "soft information" to prove that customers of financial indicators, to achieve "full disclosure of customer information," the purpose, while for the concrete implementation of soft information by the banks of the client area managers as native of bank customers for the regional team of managers, they can take advantage of geographical, popular advantage to carry out the work of credit to facilitate a full understanding of the moral quality of business owners, capital accumulation, business conditions and other "soft information." primary branches can not dedicated review post, the review process by the loan officer and regional manager in the completion of the investigation and the decision-making in order to reduce part of the process, improve efficiency, there is no complicated customer rating and evaluation process, the regional manager may direct further investigation: examination and approval authority granted directly to individuals , the implementation of the regional manager responsibility system. relational lending to a large extent dependent on the regional manager and loan officer of the company's proprietary information and credit decision-making power of the match, decision-making can be quick and easy. Links to free download http:/ / www.hi138.com (c) help to reduce the risk of bank loans
In relational lending, the relationship between banks and enterprises established long-term close relationship, grasp a lot of business proprietary information, which can understand and monitor corporate behavior. Relational financing can be less dependent on the market and the law, the legal system and the case of imperfect market system, high cost of collecting information through the market through long-term relationship within the organization and lower the cost of gathering information. relationship-based financing system, banks can adapt to their grasp of the information to monitor the borrower, to avoid reverse selection and moral hazard. relational lending between banks and enterprises in solving the information asymmetry has an outstanding advantage and, with the increase of time financial institutions, small and medium enterprises operating conditions, the credibility level of understanding is deepening, access to information for SMEs The cost is gradually decreasing, the soft information than "hard information" to better understand the borrower's circumstances, to better ensure the security of loan funds.


Fourth, the use of relationship-based financing solutions for small and medium enterprises financing difficulties, Hainan Province, the specific measures

(A) increasing the supply of small and medium financial institutions
Hainan Province, a small number of small and medium financial institutions, small and medium commercial banks only light China World Bank and Shenzhen Development Bank, also decreasing the number of credit unions, trust companies, security companies, small loan companies, finance companies, almost a blank. To establish a small enterprises and small and medium financial institutions, are based loans first financial institutions to increase the number of small and medium for the specific circumstances of Hainan, in the economically developed regions to establish micro-loan companies, and appropriate reduction of registered capital, capital mainly by the enterprise shares, as more favorable to mobilize private capital, where the public can raise the loan was mainly targeted to the region's businesses in economically underdeveloped areas, serious market failure, government intervention at this time is the most effective solution, give full play to existing rural credit social role, and even each village by village credit department, or injection by the government to give some subsidies to establish semi-government-dependent, local management of rural financial institutions to address small business, small business short-term capital needs. In addition should actively establish policies and joint-stock guarantee company, guarantee loans for SMEs, large amount of security can guarantee the implementation of the joint, usually operate independently.

(B) the financial institution to establish a small business loan service center
1, a regional credit rating of people, reduce information costs small business loan service center selected in the township mayor, mayor, etc., as the regional agent, where the local agent of permanent residence, the establishment of SMEs, the development of the whole process are very understanding in the process of long-term contact with SMEs, for the business conditions, the quality of leadership and quality, product quality, sales, etc. are very familiar with by local agents to provide credit services to small and medium financial institutions equal from the outset to obtain a long-term cooperation between banks and enterprises in order to have inside information advantage and also through local agents and personnel to effectively monitor the borrower after the act, after the loan is to reduce the moral hazard where agents can even represent more than one small financial institution's business, who will record non-compliance, will help optimize the allocation of funds.

2, the establishment of regional managers, decentralization to reduce transaction costs can choose primary small business loan service center operations manager, as a regional manager district manager can be installed under the 3, 4 staff, accountant, cashier and clerical With increase in business volume, employees can be increased. to give its decision-making regional business agent of oversight, as long as the loans meet certain requirements, and within certain limits, coupled with a regional credit rating of people's credit certificate, the regional manager can direct approval, eliminating the complicated process of SME loans, reduce transaction costs in addition to the grass-roots business manager responsible for loan review, is also responsible for audit, reporting regularly to the top job. In addition, the regional manager as decision-makers, but also to study borrowers have to explore the potential borrowers, and responsible for communicating instructions from their superiors and instructions due to the complexity of the language area of ​​Hainan Province, it is recommended to be primary candidates for the local business manager for many years of life, and have some experience as the.

3, the incentives through the establishment of regional credit rating and the regional manager, the credit generated in the process can reduce transaction costs and information costs, but will inevitably generate principal-agent problem, the borrower may be assessed through bribery and credit regional manager to obtain loans. to solve the principal-agent problem requires a certain incentives, regional credit rating and regional managers to their performance-related, according to a certain proportion of borrowers given repayment after the commission, allowed to understand long-term gains far greater than the current temptation.

(C) innovative financing credit facility for SMEs
1, the person in charge of SMEs to open credit card business. To some of the good credit of small business owners to open a certain amount of credit card business, enterprise funds can also obtain personal credit to ensure that with the demand by small business owners, with the take over also improve the financial system and the operational efficiency of physical systems for timely repayment can be many times more than the business owners can extend their credit card interest-free period and pay interest policies.

2, the use of accounts receivable claims the problem of collateral pledged to solve the SME financing main difficulty in collateral, SMEs small number of high-value real estate, there is a rich resource of personal property, including intellectual property, raw materials, machinery and equipment, accounts receivable and so can be used as collateral for SME financing of goods or property, especially accounts receivable, Hainan province enterprises about 200 - 500 million accounts receivable in a "sleep "among, if SMEs can take full advantage of Hainan Province, these resources, with the" People's Bank of China accounts receivable registration publicity system, "the platform to form an effective credit guarantee texture, you can credit financing through commercial banks, can reduce SME financing costs.

(D) the establishment of relational lending risk prevention mechanism
As the relationship-based financing more dependent on the sense of information, rather than digital information, there is inevitably over-tendency to soft budget constraints and commercial bank rescue to be sure all the adverse consequences of difficult business by commercial banks themselves. How to further improve small business financing to meet the rate, and effective control of financial risk, commercial banks face the problem of long-term needs.

1, improve the SME credit management system Consider a simple small business financial system, the information asymmetry between banks and enterprises and other practical problems, by credit rating, a full range of incentives such as transform, specifically developed credit rating system, the development of standardized operating specifications and credit standards. loan officer can visit the companies. a risk assessment classification standards will be potential customers, to achieve active-site marketing.

2, adhere to double credit investigation, field survey, substance over form principle, to collect corporate "soft information." Grassroots manager, loan officer in carrying out the investigation by focusing on credit from various angles and channels to collect information and informed by the , industry associations, such as upstream and downstream customers to the external investigation of the industrial chain, the basic situation of SME customers on cross-reflection, in order to improve the reliability of the information.

3, after the establishment of early warning mechanism for granting of bank credit should be adopted after the monitoring means, timely information to small businesses and affiliates of default information into our information management systems or in-house communications, malicious evasion of bank debts for small businesses to be combined sanctions or public disclosure. Links to free download http://www.hi138.com