The Alleviating Effect of No-Repayment Loan Renewal on the Financing Predicament of Micro and Small Enterprises

The financing predicament of micro and small enterprises (MSEs) is disproportionately concentrated at the loan renewal stage. Under the conventional "repay-before-renew" model, MSEs are compelled to resort to high-cost bridge financing, which, coupled with the uncertainty of renewal approval, exposes them to soaring costs and the risk of capital chain rupture. The no-repayment renewal policy aims to fundamentally sever the liquidity risk and cost spiral triggered by bridge financing. On the theoretical basis of information asymmetry and credit rationing, this paper reveals the specific mechanism through which the renewal stage amplifies financing distress, and systematically examines the policy's alleviating effects through three pathways: bridge cost elimination, liquidity risk mitigation, and bank-enterprise relationship stabilization with expectation improvement. The study finds that the three mechanisms form a positive feedback loop, yet obstacles including banks' risk preference constraints, persistent information asymmetry, structural coverage gaps, and lagging supporting institutions continue to restrict the policy's full effectiveness. Accordingly, this paper proposes optimization paths encompassing incentive-compatible regulatory design, fintech-enabled information sharing, expanded and targeted coverage, and a collaborative risk prevention system.