Relationship Lending and Financing Efficiency of SMEs

Financing is of great importance to SMEs.Though SMEs have made great contributions to our society and economy,the funding to them is not enough,which hinders the further development of our economy.As banks dominate the financing in our economy,most borrowers seek financing through bank credit.The availability and cost of bank credit determines the financing efficiency of SMEs.Given the lack of standardized management,financial information disclosure and collateral assets in many SMEs,relationship lending is considered to be the most effective approach to improve SMEs financing.This paper employs entropy weight,factor analysis,and multiple regressions to analyze the impact of the bank-enterprise relationship on the financing of SMEs.In this process this paper provides policy suggestions to promote cooperation between banks and enterprises and alleviate the financing difficulties of SMEs.