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SME financing in China

Chen Xiang Liu

No 2007-29, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: SMEs have a great contribution in China’s economic expansion. However, the financing predicament currently faced by SMEs constitutes a great bottleneck for their development. Banks are reluctant to lend to them, mainly due to the lack of collateral and their poor capability in pricing risk. This is the reason why credit guarantee institutions play a key role in SME financing and the perfection of the credit guarantee system is important for promoting their access to credit. In addition, the lifting of the ceiling on lending rates as well as other steps taken by banking authorities will encourage bank lending to SMEs. Finally, informal finance has a significant part in SME financing.

Keywords: SME financing; credit guarantee; informal finance (search for similar items in EconPapers)
JEL-codes: E26 E51 G21 O53 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2007
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-dev, nep-mfd and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2007-29

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