Local Governments' Responsibility in Solving the Financing of SMEs

The financing difficulty of SMEs in China is not only a universal but a special problem.Existing measure to solve this problem is to force banks to loan to SMEs by vertical administrative instructions and guidance.But the measure is conflict with the inherent requirements of banks operations,so result is not satisfactory.We should strictly approve SMEs,enhance their expected profitability and construct credit ecology to increase will that banks lend to SMEs.In all those respects,local government should play an irreplaceable role and has indispensable responsibility.