Research on the Credit Guarantee of SMEs

This article puts forward the third-party guarantee mechanism model with uncertain information. And proved in incomplete information conditions, Guarantee agencies charge premium and reverse collateral will change the profit function and reduce the income of SMEs. It makes partial lower risk SMEs who cannot provide counter-guaranty exit the credit-guarantee market, resulting in the appearance of credit guarantee paradox. The government financing subsidies will effectively relieve SMEs´ credit risk. Through the scale amplification effect of loan guarantees, it improved the incomes of bank and guarantee agencies.