FINANCING OF SMALL BUSINESS IN CHINA: DIFFICULTIES, REASONS AND SOLUTION

摘要

This study reports on the findings of a survey of small businesses with respect to their operation and financing. A sample of 44 small businesses representing 6 cities in east of China was examined in detail. It is found that there are a large number of small businesses have never got loans from banks although resources are very scarce in their operation and small businesses are playing more and more important roles in Chinese economy. It is also found that more than 80% of small businesses can't obtain enough trust by the banks, therefore asymmetric information between small businesses and banks are presented as the fundamental barrel preventing small businesses from getting loans. Approaches of how to solve the problem of financing of small businesses in China, especially in the aspect of how to diminish the asymmetric information, are given as well.