Analysis of the Financing of SMEs in Shandong Province
|Keywords||Shandong Province SMEs Financing Jiangsu Province|
After thirty years of reform and opening up, Shandong Province has made great progress in economic development, and SMEs also have made great development and become one of the most active economic powers of the national economy in Shandong Province. The development of SMEs has played a positive role in mitigation of current employment pressure, activating market economy, promoting technological innovation and maintaining a sustainable and stable development. According to statistics, by 2008, there were approximately 590,000 SMEs in Shandong Province, accounting for 99% of the total enterprises in the province. The value added of SEMs accounted for 53% of the GDP of Shandong Province and the tax revenue provided by SMEs accounted for 65% of the province’s fiscal revenue.80% of the province’s urban jobs were provided by SMEs and more than 80% of rural workers were employed in SMEs.However, due to institution and their own constraints, SMEs development has been plagued by financing problems, such as lack of endogenous financing and lack of direct financing and indirect financing. In the first half of 2008, the increased credit outstanding for SMEs only accounted for 9% of 146.86 billion yuan of Shandong Province. According to a survey of eight cities, include Jinan, Weifang and Yantai, the financing gap was 74.8 billion yuan for SMES whose investment were over 500 million yuan in 2008, and the funding gap was 300 billion yuan in Yantai. Although, in order to promote the development of SMEs and resolve the financing problems, State and Shandong Provincial government have adopted a lot of related policies and regulations, such as《SME Promotion Law of the People’s Republic of China》in 2002,《Comments on further strengthen and improve financial services for SMEs of Shandong Provincial Government》in 2008,《Some comments on further promote the development of SMEs of State Council》in 2009. However, the financing difficulties facing SMEs of Shandong Province has not been solved, which is directly related to the steady and healthy development of national economy of Shandong Province. This paper analyzes the status of financing difficulties of SMEs in Shandong Province by compared with Jiangsu Province where SMEs are highly developed from theory and reality. This part includes status of endogenous financing, status of direct financing and indirect financing. From three angles, respectively the SMEs themselves, government policies and financial institutions such as commercial banks, this paper also analyzes the reasons of financing difficulties of SMEs of Shandong Province. Based on the experiences of Jiangsu Province, this paper gives some suggestions to solve the financing difficulties of Shandong Province, such as strengthen the credit system for SMEs of Shandong Province and raise the credit level of SMEs; improve the financing environment and financing support system of SMEs; encourage financial innovation for SMEs of Shandong Province, includes bank system, capital market, credit guarantee system and VC and so on.