Can the Digital Development of Banks Help Small and Micro Enterprises to Alleviate Difficulties?Empirical Evidence Based on the Data of Urban Commercial Banks
Small and micro enterprises play an important role in both developed and developing countries,serving as the backbone of maintaining economic growth.They stabilize the employment rate,promote social development,and reflect the resilience of a country's economy.Currently,bank loans are the main financing channel for small and micro enterprises.In transactions,due to the difficulty of obtaining the operation information and high operational risks for small and micro enterprises,banks often choose to provide funds to well managed large enterprises.The internal and external diffi-culties have caused more cash flow pressure,financial problems,and financing constraints for small and micro enterprises,and they need external support more than ever before.The government has issued a series of policies to promote banks and capital market to strengthen financial services for small and micro enterprises,in or-der to help them overcome difficulties.The development of digital technology has changed the traditional mode of banking services for small and micro enterprises.The application of big data,cloud computing,and artificial intelligence has greatly broken down the geographical and temporal boundaries of banking service enter-prises,making the financial services more specific,convenient,and efficient.However,the process of digitalization for commercial banks was not going smoothly.In China,digital development of banks may face obstacles.Some small banks are only superficially digitizing their products and have not fully tapped into the value of digitization.Therefore,further analysis is needed to justify whether the digital development of banks will help improve their loan supply to small and micro enterprises.In view of this,this article raises the following questions:What specific impact will the digital develop-ment of commercial banks have on the supply of loans to small and micro enterprises?Does the impact vary in regions with different levels of financial development and factor development?In response to the above questions,this article selects panel data from 42 city commercial banks in China from 2012 to 2020 to study the impact of digital development of banks on the supply of credit to small and micro enterprises.The empirical results indicate that:firstly,there is a U-shaped relationship between the digital devel-opment of commercial banks and the supply of credit to small and micro enterprises.The impact of digital development of banks on the supply of credit to small and micro enterprises shows a trend of first decreasing and then increasing.In the early stages,due to fac-tors such as high digital investment costs and insufficient customer recognition,the digital development of banks has had a restraining effect on the credit supply to small and micro enterprises.Then the commercial banks keep promoting digital development through technology and other means,enhancing their ability to prevent post loan risks for small and micro enterprises and providing diversified online financing channels for them.Therefore,the digital develop-ment of banks has played a promoting role in the supply of credit to small and micro enterprises.Secondly,the relationship between the digital development of commercial banks and the supply of credit to small and micro enterprises is heterogeneous.In regions with either high or low levels of regional financial development,the U-shaped relationship between the digital development of commercial banks and the supply of credit to small and micro enterprises holds.However,in areas with lower levels of financial development,the impact of digital banking on the supply of credit to small and mi-cro enterprises has shifted from suppression to promotion later.In regions with high levels of factor development,the U-shaped rela-tionship between the digital development of commercial banks and the supply of credit to small and micro enterprises holds.Thirdly,the implementation of targeted reserve requirement ratio cuts has a positive regulatory effect on the U-shaped relationship between the digital development of banks and small and micro enterprise credit.It can bring about an early turning point of the U-shaped relation-ship.In the context of the digital development of commercial banks,in order to effectively improve the financing conditions of small and micro enterprises through the digital development of commercial banks,the following suggestions are proposed:Firstly,banks should optimize traditional loan technologies by enhancing their computing power through digital development to improve the credit supply for small and micro enterprises.Small and medium-sized banks should accelerate the establishment of digital thinking,deepen their understanding and comprehension of digitalization,streamline their development ideas,and better carry out transformation and practice.It is not only necessary to enhance the understanding of digital means themselves,but also to improve the understanding of their application scenarios.In the process of digital practice,it is not only necessary to carry out digital trans-formation of infrastructure and traditional businesses,but also to accelerate the digital transformation of talents,strengthen employee training,and better integrate the achievements of digital develop-ment with bank credit business.Innovation in small and micro loan products should be persistent,making them more intelligent,us-er-friendly,and convenient,and continuously amplifying the impact of digital development in improving small and micro loans.Secondly,the credit environment should be improved to help the digital development play a more effective role.Policy guidance should be strengthened to increase assistance and support for the digital development of banks.External incentives from the govern-ment will encourage banks to invest internally,accelerating their digital development process,and thus encouraging banks to adopt financial technology to expand small and micro enterprise loan services.Some banks in our country have problems such as lack of funds,outdated technology,and insufficient reserve of scien-tific research talents.Therefore,the government should help these banks,provide funding and policy support,assist them in technolo-gy research and development,attract high-level scientific research talents for employment,and promote their digital transformation.At the same time,government departments should be aware of the risk issues in the digital development process of commercial banks,strengthen regulatory efforts,and prevent financial risks.Thirdly,small and micro enterprises should adhere to the principle of commercial sustainability,consolidate their own foundation,and establish a good corporate culture.It is necessary to actively enhance internal governance capabilities,continuously regulate development behavior,strictly control business risks,repay on time,and maintain good credit.It is necessary to standardize the account-ing and financial systems,continuously improve the transparency of financial information,and perfect one's own soft and hard infor-mation.Managers of enterprises should continuously improve their financial literacy,master certain financial knowledge,be aware of favorable policies issued by the government,combine them with their own reality,and choose financing methods that are suitable for the operation and development of the enterprise.
Commercial BanksDigital developmentFinancing of small and micro-enterprisesCredit supply
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