Analysis of the Financing Mode of Small and Medium-Sized Enterprises Under the DC/EP Platform Based on a Comparison with the Traditional Bank Financing Mode

As a legal currency with the credit endorsement of the Chinese government, DC/EP has many advantages and special characteristics. Based on the application of DC/EP in the financing of small-and medium-sized enterprises(SMEs), this paper studies the optimal financing decisions of SMEs under both the traditional financing mode and the DC/EP financing mode. Considering the construction and use costs of DC/EP and the role of DC/EP credit traceability in improving mortgage rates, this paper explores the feasible range for SMEs to select DC/EP financing. It is found that mortgage rates affect the returns of SMEs when they take on loans; under different credit strategies,the pledge rate set by the bank will affect the financing willingness of SMEs. The participants had different optimal mortgage rates to optimize the returns of borrowers and banks. High-quality SMEs are more willing to use the DC/EP platform for financing. With the increase in default costs, banks will be more inclined to use DC/EP, while enterprises will be inclined to utilize the traditional financing mode. Through the comparative analysis of the two financing modes, the default cost range that neither banks nor borrowers are willing to use DC/EP is found. This study provides theoretical support and management inspiration for scientific decision-making to solve the financing problems of SMEs by using DC/EP.