Empowering Small and Medium Enterprises: A Paradigm Shift in Financing Mechanism and Policy Enhancement

This study presents a transformative narrative in the financial landscape, envisioning enhanced financing prospects for small and medium enterprises (SMEs). By dissecting the dynamics between financing mechanisms and policy frameworks in the stock market during 2015-2016 and 2020-2023, the research unveils a significant reduction in average discount rates under the new private placement policy, promising positive prospects for SMEs. Notably, major shareholder involvement demonstrates a positive correlation with discount rates in fixed-price issuances and a negative correlation in bidding issuances under the new policy. The correlation between major shareholder involvement and discount rates emphasizes market-driven competitive biddings potential to further alleviate discount rates. Policy recommendations advocate for enhanced regulatory oversight on private placements with major shareholders while championing competitive bidding. The study not only aligns with core findings but also aspires to catalyze a future where SMEs navigate financial challenges efficiently, fostering substantial economic growth. This dual perspective contributes to reshaping the SME financing landscape.