the informal financial market(shadow banking sytem) can be very volatile and undependable.
it is not easy for SMEs in other countries to get formal financing.
The main impediment in China is local governments, which compete with SMEs for bank loans and inevitably crowd them out from the formal banking sector.
Local governments rely on bank credit to invest in infrastructure and real-estate development.
Another impediment is the dominance of large banks, and far less financial institutions of other kinds. The four largest banks in China account for 60% of the country’s total bank lending. by Nov 26