Micro-enterprises struggle to get loans from big banks due to high costs and risks. Small banks have advantages in understanding these businesses and reducing transaction costs. By innovating credit mechanisms, loans to micro-enterprises can be provided sustainably, benefiting all involved. A mathematical model was used to analyze the challenges in micro-enterprise financing and propose credit mechanism innovation as a solution. The case study of Taizhou Commercial Bank showed positive outcomes, offering insights for improving micro-enterprise financing in our country.