The difference between direct financing and indirect financing mainly lies in whether the creditor-debtor relationship is directly formed between the demanders and suppliers of funds in the financing process.
With the participation of financial intermediaries, the main basis for judging direct financing is whether the intermediary has formed a creditor-debtor relationship with the demand side and the supply side of funds during the financing process. If the intermediary has formed an obvious creditor-debtor relationship with both parties, it means that the financing behavior has not been delayed and belongs to indirect financing. On the contrary, it is direct financing.
First, direct financing.
Financing is the symmetry of indirect financing. A financing method without the intervention of financial intermediaries. In this financing mode, in a certain period of time, the capital surplus unit will provide monetary funds to the demand unit through direct agreement with the demand unit or purchase the securities issued by the demand unit in the financial market.
Commercial credit, stocks and bonds issued by enterprises and direct loans between enterprises and individuals all belong to direct financing. Direct financing is the direct supply of funds. Compared with indirect financing, investors and financiers have more freedom of choice. Moreover, for investors, the income is higher, but for fundraisers, the cost is lower. However, due to the different credit degrees of fundraisers, the risks borne by creditors are also very different, and some direct financial funds are irreversible.
Second, indirect financing.
Indirect financing means that there is no direct relationship between capital surplus units and units, but independent transactions with financial institutions, that is, capital surplus units first provide their temporarily idle funds to these financial intermediaries, and then these financial institutions provide funds to these units in the form of loans, discounts, or by purchasing securities issued by units that need funds, thus realizing the process of financing.
The State Council to determine the financial support industry measures to encourage direct financing _ Xinhuanet
What is direct financing?
Question 1: What is direct financing?
Question 2: What does direct financing mean?
Direct financing refers to the direct agreement between the units with temporarily idle funds (including enterprises, institutions and individuals) and the units that need supplementary funds, or in the financial market, the former buys the securities issued by the latter and provides monetary funds to the units that need supplementary funds, thus completing the financing process.
The basic feature of direct financing is that units with temporarily idle funds and units in need of funds directly raise funds without any intermediary links.
Types of direct financing:
(1) commercial credit. Commercial credit refers to the forms of financing directly related to commodity transactions provided by enterprises, which are mainly manifested in two ways: one is to provide commercial credit for commodities, such as credit sale and installment payment between enterprises, and financing is mainly realized by providing commodities; The other is to provide commercial credit in currency, such as down payment and advance payment on the basis of commodity transactions. This kind of credit mainly provides currency related to commodity trading to realize financial financing. With commercial credit, commercial paper appears as a proof of the relationship between creditor's rights and debts.
(2) National credit. National credit is a financing activity with the state as the main body, which is mainly manifested as follows: the state raises funds by issuing national debt, such as issuing national debt or government bonds. The funds raised by the issuance of treasury bills or bonds by the state form the debt income of the state finance, but it belongs to a lending behavior and has the basic characteristics of repayment and interest payment.
(3) Consumer credit. Specifically, consumer credit refers to the credit provided by enterprises and financial institutions to individuals in the form of goods or money, including: enterprises provide housing or high-grade durable consumer goods to consumers by installment, or financial institutions provide housing loans, car loans, student loans, etc.
(4) Private personal credit. It refers to the financing activities between private individuals, which is customarily called private credit or personal credit.
The securities used in direct financing are usually non-financial institutions, such as government bonds, government bonds, corporate bonds, stocks, mortgage contracts, loan contracts and other forms of IOUs or debt certificates, which are generally called direct securities.
Characteristics of direct financing:
(1) directly. In direct financing, the fund demander directly obtains funds from the fund supplier, and establishes a direct creditor-debtor relationship between the fund supplier and the fund demander.
(2) dispersion. Direct financing is carried out among countless enterprises, between the government and enterprises and individuals, between individuals, or between enterprises and individuals, so financing activities are scattered in various occasions and have certain dispersion.
(3) There are great differences in reputation. Because direct financing is carried out between enterprises, individuals, or between enterprises and individuals, the credit standing of different enterprises or individuals is very different, and it is often difficult for creditors to fully and deeply understand the debtor's credit standing, which leads to great differences and risks in financing credit standing.
(4) It is partially irreversible. For example, direct financing, the funds obtained by issuing stocks do not need to be returned. Investors have no right to demand the return of their shares, but can only sell shares in the market, and shares can only be transferred between different investors.
(5) Relatively strong autonomy. In direct financing, within the scope permitted by law, the financier can decide the object and quantity of financing by himself. For example, in commercial credit, buyers and sellers can decide the variety, quantity and object of credit purchase or credit sale on the premise of mutual willingness; In stock financing, stock investors can decide the variety and quantity of stocks at any time.
Can bank loans replace direct financing?
You can't.
According to the statistics of China Bank official website, at present, the financing of small and medium-sized enterprises is mainly indirect financing, and 87% of indirect financing comes from bank loans. Due to low credit, insufficient mortgage assets and high financing cost, it is difficult for small and medium-sized enterprises to obtain bank financial support, and the funding gap is huge, so bank loans cannot replace direct financing.
Bank loan refers to an economic behavior that banks lend funds to people in need of funds at a certain interest rate according to national policies and return them within the agreed time limit.
The loan funds obtained by enterprises from banks belong to
The loan funds obtained by enterprises from banks belong to direct financing. Refers to the financing activities in which there is no direct agreement among financial institutions, capital surplus units and capital demand units. Indirect financing refers to financing through financial institutions, and the behavior of enterprises obtaining loans from banks belongs to indirect financing.
Briefly describe the difference between direct financing and indirect financing.
The difference between direct financing and indirect financing mainly lies in whether the demanders and suppliers of funds directly form the creditor-debtor relationship during the financing process. The specific differences between direct financing and indirect financing are as follows: \ 1. Different concepts:. Direct financing refers to the financial behavior that the fund supplier and the fund demander directly form the creditor-debtor relationship through certain financial instruments. Indirect financing refers to the behavior of indirect financing between capital suppliers and capital demanders through financial intermediaries. Second, the financing instruments are different: Tools for direct financing: \ a. Commercial paper and direct loan certificate; Stocks and bonds. Indirect financing instruments: various financing instruments issued by financial institutions, such as certificates of deposit and loan contracts. Third, the advantages are different: Advantages of direct financing: \ a. There is a close relationship between capital supply and demand, which is conducive to the rational allocation of funds and the improvement of resource utilization efficiency. \ b. Low financing cost and high return on investment. Advantages of indirect financing: \ a. Diversified financing tools can flexibly and conveniently meet the financing needs of both the capital supply and demand sides. \ b. Financial institutions can reduce risks through diversified strategies with high security. \ c. It is conducive to improving the scale efficiency of financial activities and improving the efficiency of the use of funds in the whole society. \ 4. Different restrictions: Limitations of direct financing: \ a. Both parties to direct financing are subject to many restrictions in terms of capital amount, term and interest rate. \b The liquidity and liquidity of direct financing instruments are generally lower than those of indirect financing instruments due to the development of financial markets. \ c. The risks and responsibilities of fund suppliers are relatively large. Limitations of indirect financing: \ a. The direct contact between the supply and demand sides of funds is cut off, which is not conducive to the supplier's supervision and restraint on the use of funds. \ b. For the demand side, it increases the financing cost; For suppliers, it reduces revenue.
So much for the introduction of direct loan financing.