Big Data and SME financing in China

In recent years, big data has become increasingly popular, attracting a lot of attention from all angles around the world such as academia, industry, even government. Big data can be regarded as power of the next generation for the economy. Today, Big Data represents a new way to process information and support all industries and business areas. China's financial markets have been dominated by state-owned banks for a long time, but these banks provide inefficient support for SMEs and private enterprises. As Chinese Internet companies provide more and more financial products and services, the development of big data is changing financial markets. Due to the credit rating model and borrower identification, online financial services will be more effective than traditional banks. These services also challenge the control of state-owned banks.

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Small and medium enterprises play a very important role in the Chinese economy, but there are still some problems in raising funds. According to the data of the Chinese company survey system, more than 40% of companies surveyed are fund shortage. Approximately 66% of recent SMEs have problems accessing bank loans. In 2013, loans to SMEs were only 23.2%. For small and medium-sized enterprises it is only 4.7% and it is more difficult to obtain short-term capital lending. Credit assets of state-owned institutions consist mainly of loans assigned to state enterprises and large companies.

Small business (SME) is the backbone of China's economy, but you can not gain credibility of banks. As a result, SMEs rely on a wide range of alternative sources, including informal finance, P2P (Online Peer to Peer) platform, NBFI (registered bank) and underground financial. In this paper, we will distinguish between different types of "shadow bank" to clarify misunderstandings about the nature of China's informal financial intermediation risk. The progress of SME loans in other contexts shows that regulated and managed NBFCs provide a permanent basis for commercial financial intermediation even in industrialized countries.