On the sustaining development of credit guarantee system for Chinese small and middle sized enterprises

Based on analysis of the aim and current situation of credit guarantee system for Chinese small and middle sized enterprises, the system is investigated to ease the difficulties of financing and guaranteeing for small and middle sized enterprises to some extent. The main barriers of development including thoughts, laws and social credit system are proposed. Credit guarantee system is regarded as the financial institution with economical leverage that operates credit risk. In order to assure successful development of the system, firstly, capital system should be established, and government capital should be introduced into commercial guarantee institutions in the form of preferred stock. Secondly, risk compensation system should be developed to strengthen the mechanism of guarantee investment. Thirdly, social credit system should be put straight and developed. Capital and credit rating institution should be responsible for their evaluation results.