To Enhance Inclusiveness of Bond Market for Sci-Tech Enterprises

At present, Sci-Tech enterprises face various challenges when it comes to debt financing. First, in their infancy, Sci-Tech enterprises may suffer from problems, such as under-developed corporate governance, unstable cash flows, unpredictable recovery of accounts receivable, all of which undermine their profitability to varying extents. As they usually underperform in terms of financial indicators, Sci-Tech enterprises have difficulty in getting funding in the bond market. Second, rating mechanism where issuers select and pay rating agencies compromises the objectivity and neutrality of ratings, leading to inflated ratings. In addition, the existing rating model takes financial data as the core, so only companies large in asset size and steady in net profit can obtain high ratings. Third, small institutional investors such as private equity funds that have suitable risk identification capability and risk appetite are often rejected by the credit bond market due to restrictions on the asset size and other factors. The following recommendations are hereby proposed to help the bond market become more inclusive to Sci-Tech enterprises