The Influence of Internet Finance for Sme Financing in China

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The Influence of Internet Finance for SME Financing in China

Currently, SME (Small And Medium-size enterprises) is the foundation of promoting national economy development, constructing the subject of market economy and promoting the development of social stability in China (Wang, 2011). In recent years, the economic situation has experienced dramatic change and this huge variation stimulates financing needs of SMEs in China greatly. Nevertheless, the majority of SMEs have financing difficulties due to their personal limitations and insufficient external support. As a result, it is hard for them to have a further development. With the advent of the information technology revolution, Internet Finance is considered as a new effective way to solve the financial difficulties of SMEs and it brings about many positive influences, although there are some negative aspects to improve. This essay will firstly inform background information about the reasons for SME financing difficulty as well as Internet finance’s current condition. Additionally, it will give evidence for the main argument that there are more positive influences than negative influences of Internet finance on minor enterprises’ financing issue. Finally, some practical suggestions will be put forward, helping Chinese SMEs to find the optimal choice in financing.

There are more SMEs in China than before in accordance with the relevant statistics. According to Wang (2011), SMEs account for 99.9% of the total number of firms, provide more than 60% of GDP and 70% of import and export trade. The data reveal that SME is an important part of Chinese economy and makes a great contribution. In addition, SMEs have a profound influence on social issues by offering 84% of total employment and 80% of urban jobs. They are also the main force of independent innovation, provide 66% of invention…...

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