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Bank Institution Size, Loan Technology and Small Business Financing

【Authors】
LI Huamin, WU Fei
【WorkUnit】
Guangdong University of Finance, 510521.
【Abstract】

Based on the survey data of small and micro enterprises (SMEs) in the four prefectures/cities of Guangdong Province, this paper introduces the optimal bank size structure into the analysis framework to study the financing efficiency difference among SMEs under different loan technology combinations. The study has found that hard information loan technology is unsatisfactory in solving the financing problem of SMEs, but soft information loan technology has shown a strong promotion effect. Further research has found that there is no restriction on financing technology for large banking institutions to finance small businesses. Large banking institutions have obvious comparative advantages in both hard and soft information loan technologies. This study finds empirical evidence that deviates from the empirical evidence of “small bank advantage”. Soft information loan technology is enough to become an important link connecting “big banking institutions and SMEs financing”, especially in a good regional financial environment. The conclusions of this study and its policy recommendations will help to re-examine the banking system that suits the financing of SMEs, thus providing new empirical support and theoretical basis for the current “one-third, two-thirds and half” policy.
JEL:G14, G18, G21

【KeyWords】
Banking Institutions Size, Small Business Financing, Loan Technology, Financial Ecological Environment