How do Small and Medium-sized Enterprises Evaluate the Activities of Private Financial Institutions and Government-affiliated Financial Institutions? Is there a difference by firm age?

It is commonly agreed that both private and government-affiliated financial institutions should support small and medium-sized enterprises in accordance with their life stages. In this paper, using the questionnaire survey conducted in 2013 (4,635 companies responded), we analyze how firm ages affect their opinions on financial institutions.

Compared with old firms, young firms tend to answer that they don't have main banks. When young firms borrow from the main banks, their borrowings are highly covered by the public credit guarantee. In addition, we find that, at the early stage when main banks don't have enough qualitative information about the firms, financing by the Japan Finance Corporation (JFC) is likely to stimulate private financial institutions, while regarding older firms that have established relationships with banks, such stimulating effect is weak. Finally, there are no clear trends with respect to age for many questions. Therefore, it should be noted that the financial needs of firms don't change simply according to firm ages.