Direct and Indirect Financing of Small & Medium-Sized Enterprises: Problems and Discussion

The reasons which make(SMEs) small medium-sized enterprises financing difficulty are from two aspects:one is internal obstacle,namely,many SMEs lack of credit.Their property rights are indistinct.Compared with large-sized enterprises,SMEs' information is intransparent and asymmetric.Another is external obstacle which is from current finance system shown as lack of finance service system to support SMEs development.The key to solve the problems is to follow the law of SMEs growth and their financing cycle,to improve their financing capability,and to construct diversified and compound-developing finance service system,including,to establish the indirect financing system in which small and medium-sized private-owned banks play the main role,and to set up the multi-level direct financing system in which regional small capital markets play the key role.