In the credit market, the commercial banks and the enterprises keep a close relationship in order to communicate information and enhance financing efficiency, which leads to the widespread adoption of relationship lending.

On the basis of the relationship between banks and enterprises, the paper firstly introduces the relationship lending which is the traditional means of foreign bank systems and it s benefits and costs.

The paper provides empirical evidences on the practice of the theory of SMEs\' relationship lending in China and also reveals the application value of SMEs\' relationship lending.

A Literature Review of Foreign Relationship Banking Theory

In this paper we offer a theoretical model to analyze relationship banking and the pricing behavior of banks in a Bertrand competition framework with m.

The Study on SME Finance and Relationship Lending;

According to the study on credit home abroad,the relationship lending is an important choice for small/medium-sized businesses to get rid of information asymmetry in financing.

In this paper, with the analytical framework applied to Chinese reality, we learn that the development of relationship lending, and the establishment of small and medium-sized financial institutions are able to promote SMEs\' financing.

The legal relationship between a bank and its clients who have accounts in the bank is the relationship of loan contract in nature.