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Study on the Effective Operation Models of Credit Guarantee System for Small and Medium Enterprises in China

Author(s): Ping Zhang | Ying Ye

Journal: International Journal of Business and Management
ISSN 1833-3850

Volume: 5;
Issue: 9;
Date: 2010;
Original page

The credit guarantee system for small and medium enterprises (SMEs, here in after) has been established formore than 10 years in China. There are so many problems resulting in low-effective operation of the creditguarantee system, such as the risks share and amplification multiple of guarantee determined by financialinstitutions and guarantee organization to reasonably are unreasonable. Aiming at these, this article gave ananalysis framework of the effective operation of credit grantee system for SMEs, and then took Shenzhen as acase to analysis. Here we demonstrate that, the effective operation of credit grantee system for SMEs in Chinadependent on the improving of fund indemnity mechanism, especially the government should provide aninstitutional environment to encourage SMEs’ own innovation.
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