Based On “Long Tail” Theory to Solve Finance Difficulties of SMEs with Internet Finance

Abstract

Base on the “long tail” theory put forward by Anderson, this paper analyzes the availability of Internet finance to solve the financing difficulties of small and micro enterprises (SMEs). The SMEs mentioned above is the “long tail” demanded by finance. On the one hand, the application technology of big data in the Internet can be used to identify the financing needs of “long tail” SMEs. On the other hand, with the effects of external economy, the effects of scale economy and those of scope economy exerted on the markets of the financing of SMEs, the fund supply to SMEs will increase. In traditional financial markets, the SMEs, due to the “hyper-normal” credit rationing, were often rationed out of standard financial system. As a result, the financial supply curve bent backward. However, with the rapid development of Internet finance, the rationing degree of financial credit is relieved, the financing gaps in SMEs is offset to some extent, and the allocation of financial resources is optimized, providing a new idea to solve the financing difficulties in SMEs. Finally, this paper puts forward relevant proposals about Internet finance to solve the financing difficulties of SMEs.