Relationship between Banks and SMEs and the Cost of Financing

This paper presents empirical researches based on primary data concerning SMEs(small and medium sized enterprises) in medium-developed regions.It mainly analyzes the influence of the relationship between banks and SMEs upon the cost of financing with SMEs and puts forward suggestions concerning relevant policy making.It is discovered that in bank lending the SMEs are at a disadvantageous position.The deepening of relations between banks and SMEs does not necessarily reduce the lending rates for SMEs.Thus the SMEs tend to nourish some resentment against banking institutions which prevents the deepening of bank-enterprise relationship.