New Internet Finance for Small and Medium-sized Enterprises—Comparative Analysis of Sino-US Frameworks
Date Issued
2015
Date
2015
Author(s)
Song, Yu-Hong
Abstract
Small businesses are the engine of the world economy and touch a majority of many countries on a daily basis. According to the World Bank, both in developed countries and developing countries, small and medium-sized enterprises account more than 72% of total entrepreneurships and SMEs are the driver of employment growth, almost creating 65% of all net new jobs since 2000. In order to flourish small businesses, every government launch apartment to assist small firms with capital and legal support, such as U.S. Small Business Administration and China Association of Small and Medium Enterprises. However, the thorny problem of SMEs is that there is not enough financial capital for small businesses. It is not only the issue happened in the U.S. and China, but also a world-wide difficulty to be solved. The U.S. government tried lots of methods to ease access for small business and set up many programs to support them, including 8- (a) Business Development Program and HUBZone program, etc. And Chinese government did the same thing as U.S., providing financial assistance for SMEs. But these governmental supports failed to assist with enough capital for small business, even causing some worse situation. On the contrary, these special financial supports lead many abuses, defaults and frauds among individual small businesses. Thus, many financial institutes and governments explore different ways to find an effective investment for SMEs. With the development of internet technology, internet financial services for small business are expected to solve this difficulty. Based on the big data and online transactions, the internet financial company will provide a calculated credit for small firms and then decide how much to invest these small and medium enterprises. In addition, it is more convenient for small individual investors to gain profits from small business. Alibaba has built its own credit scoring model based on internet transactions, using big data to offer responsive financial services, overturning traditional banking models and leveraging small businesses. Under this framework, this paper focuses on the comparisons of small businesses’ history and financial methods between U.S. and China. To further analyze the core value of internet finance, this thesis attempt to elaborate the operation of Ant Financial Services and fully illustrate the risk and perspective of future internet investments. At last in this paper, there are legal suggestions based on the analysis to promote this financing method for small businesses.
Subjects
Internet Finance
Small and Medium-sized Enterprises
Capital and Bond
Ant Financial Services
Alibaba Group
Type
thesis
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