Abstract:The difficulty of getting financing and short-term bank loans has been a long-time bottleneck in the development of Small and Medium-sized Enterprises (SMEs). The Theory of Asymmetric Information is a very important factor to lead to the problem. In the credit market, small and medium-sized enterprises have advantage in information, they have better understanding of their own information than investors, and credit providers have disadvantage in the information, SMEs are likely to use information advantage to make profit, while investors making wrong decisions. On one hand, the financial lending institutions are more prudent when it comes to offering financing to SMEs as to minimize Moral Hazard and Adverse Selection. This paper first emphasizes the position of the SMEs in the national economy, and points out the role of SMEs in China's economic development and its degree of difficulty financing do not match. Plight of the financing difficulties of SMEs seriously restricts the development of SMEs. The causes of financing difficulties of SMEs are analyzed by establishing a reasonable game model.
SMEs plays an important role in the development of the national economy, but with the development of small and medium-sized enterprises, its financing requirements also increased, but at present the small and medium-sized enterprises is very difficult to obtain funds in the credit market in our country .In order to solve the financing problem of SMEs, the asymmetric information should be solved at first. Perfection and innovation of financing guarantee system of SMEs can alleviate risk financing and the financing difficulties of SMEs. Small and medium-sized enterprise itself should strengthen internal management and improving the credibility, the government should improve the credit guarantee system and credit evaluation system, and SMEs financial institutions should be developed to provide diversified financing services and reduce the information asymmetry.
Keywords: Financing; SMEs; theory of Asymmetric Information...