Research On Credit Rating Index System Of Small And Medium - Sized Enterprises

The fact that the financing difficulty of small and medium-sized enterprises(SMEs) in China has been perplexing the economic policy makers and the SME as the market main body. In a survey, only about 16% of SMEs have easy access to loans. Because of the weak foundation, the small enterprise scale, the big management risk, the low financial transparency, the no standard operation and so on, the SMEs’ financing scale is small, the financing channels is single. At the annual average point of view in 2015, in the loan demand index of SMEs is higher than the large enterprises nearly 10 per- centages. In view of the current situation of SMEs, it is very necessary to carry out credit rating on their own characteristics no matter broadening the SMEs’ financing channels and strengthening their own internal and external aspects. China’s current enterprise credit rating system, from the rating methods, rating index selection and index weight, is more attention to solvency and profitability, while pay no attention to enterprises’ development and innovation ability. Such a rating index system for evaluating is suitable for evaluating the large enterprises, which has been in a stage of stable operation, but is not justice for evaluating the credit level of small and mediumsized enterprises in a certain stage of development because this kind of rating system is not fully reflect the developing situation and prospect of small and medium-sized enterprises.So it will not be able to fully reflects credit conditions of small businesses.In this context, this paper aims to analysis the current situation and existing problems of domestic small and medium enterprises credit rating and risk management through systematically summarizing of foreign credit rating theory and method. And on the base of the quantitative and qualitative analysis of the current credit rating indexes the author aim to suggested how to improve the quantitative indexes and the qualitative indicators should be increased. So the establishment of the rating index system of SMEs should mainly consider the following two issues:First, how to select the appropriate rating indicators according to the characteristics of SMEs. Second, how to determine the weight of each rating index and how to determine the criteria to meet the characteristics of SMEs.This paper is divided into seven chapters, the contents are as follows:The first chapter briefly introduces the background and significance of this study, that is the SMEs’ financing difficulties and the new development of the current capital market in China put forward new requirements for SMEs’ credit rating. The second chapter gives a brief overview of credit risk and credit rating theory, and systemmaically reviews the history and current situation of domestic and international credit rating theory research. In the third chapter, the redefinition of SMEs in China is carried on, and the credit risk characteristics of SMEs are analyzed. The fourth chapter systematically analyzes the demostic and foreign enterprise credit rating methods and models, and introduces the international top three Rating companies’ rating method. Then it combing the domestic research, and puts forward the moral hazard and technical blind area of credit rating. The fifth chapter puts forward the establishment of SMEs credit rating index system. SMEs should have a suitable index system separately, but there is lake of a separately indicator system suitable for China’s current development stage. In the sixth chapter, the paper puts forward the quantitative indicators of SMEs’ rating which are mainly financial indicators, based on the analytic hierarchy process(AHP) to analyze the weight of the qualitative indicators. On the basis of this, it is suggested that the financial indexes of some SMEs can be modified appropriately. The seventh chapter introduces the qualitative indicators for small and medium-sized enterprises. Based on the status of the rating development, it put forward the suggestion that the economic booming indexes(including industrial and regional) and the credit datathere should be increased.The originality of this paper is:Increased the the boom index, including the SMEs’ industrial economic index and the region’s economic prosperity index in the credit rating index system. The advan- tages of industrial boom index as an important reference is that subdivided industry can locate the enterprise’s real situation precisely which cannot be crossed in the future credit rating of SMEs.The analysis system of the SME should be established as soon as possible. The disadvantage of the industrial index is that will probably increase the volatility of the economic cycle. Besides, this paper also increased the credit data as a qualitative indicator. At present, there have not yet taken the credit data indicator as a separate qualitative indicator to investigate in all kinds of credit rating index system. The importance of enterprise’s credit data and the entrepreneur’s individual credit data should be further reflected in the future economic development.The importance of enterprise information and the actual controller’s personal information should be increased in the qualitative analysis.In the analysis of the quantitative indexes, this paper has combed the enterprise’s credit rating index.In the view of the opaque financial data of the SME, it is suggested to adjust some financial indicators of some companies appropriately.In addition, the criteria to definition of small and medium-sized enterprises has been renewed.Rating applicable scope in this paper is including the SMEs’ internal evaluation in the commercial banks and the credit rating for the publishing duet bounds in interbank bond market(private debt, short-term financing bonds, etc.). Besides, it is suitable for acquisition and disposal of the small and medium-sized non-performing assets, for internet banking and other segments in the field of financing.