Credit pricing for financing of small and micro enterprises under government credit enhancement: Leverage effect or credit constraint effect

The pricing of financing credit for small and micro enterprises (SMEs) under government credit enhancement includes an important pattern to solve the financing difficulties of SMEs. Using the data of SME credit guarantee funds from Wenzhou, this paper studies the cost of credit under government credit enhancement from three dimensions: credit in different periods, category of credit granting enterprises, and factors affecting the pricing of credit. In the pricing process of credit and guarantee loans to SMEs, the leverage effect is dominant. However, from the third quarter of 2019, the credit pricing process shows the credit constraint effect. This paper found that the leverage effect occurs in the loans of non-high-tech and nonentrepreneurial enterprises, and the credit constraint effect is dominant in the loans of high-tech enterprises and entrepreneurial enterprises. Especially for high-tech enterprises, regarding the elements of interest rate premium, the statistically significant difference involves the amount and term.