A Study on SMEs Financing: A Perspective of Internal Governance

At present, some profound problems have come into being in the development of SMEs, the mostly serious problem is their difficult in financing, and many private SMEs are facing a situation of capital-strand breaks. The SMEs' difficult in financing is mainly due to asymmetric information and the chaotic financial system in surface, but the root cause is internal governance, and thus the authors suggest that SMEs should strengthen governance functions of accounting, improve information reporting system and disclosure mechanisms, reinforce internal control, pay attention to equity financing, and enhance enterprise culture construction to improve the internal governance in order to solve the financing difficulty.