Small Loan Company's Loan Structure And Performance

Since 2008,the small loan company has carried out the pilot work nationwide,whether the number of companies,the number of employees,or the paid-in capital has been developed rapidly.In recent years,under the influence of economic restructuring and the development of financial market,the overall size of the industry and the total amount of loan business in the small loan companies have also changed from the initial rapid growth to the slow development.At the same time,the overall profit level of the industry is weak,the performance has began to decline,the loan structure is unreasonable,and the risk of client default is increasing.It also makes the sustainable development of small loan companies face huge difficulties.How to improve the profitability and performance of small loan companies is the most urgent task to solve the development dilemma.Loan interest income is the main business income of small loan company.From the perspective of the company,small loan companies carry out credit business,making or adjusting loan structure is closely related to their interest income and profit level.On the practical level,in our country,small loan companies operate according to the principle of marketization in pursuit of profit maximization.It is an effective way to improve the performance of small loan companies and get out of the development dilemma by making loans scientifically and rationally,improving credit technology and risk control capabilities.From the point of theoretical research,small loan company is a special kind of credit intermediary organization.At present,the research on small loan companies' micro level credit behavior is relatively simple.It is urgent to further explore and clarify the shortcomings of the existing conclusions.Based on the above considerations,this thesis focuses on the loan structure of the small loan company,and mainly analyzes the mechanism of the loan structure on the performance and loan default risk.Specifically,we choose three types of loan structure,which are the most representative and the most important,are analyzed from three aspects:loan interest rate structure,loan amount structure and loan maturity distribution structure.In theoretical analysis,this thesis starts with the characteristics of the small loan company and the characteristics of the loan structure.Based on the asymmetric information theory,the thesis puts forward the mechanism of loan structure's effect on performance under the influence of borrowers' default risk.There is a significant relationship between loan structure and default risk,so the effect of loan structure on performance is mainly determined by the size of loan interest income and the loss of default risk.This is related to the different levels of default risk for small loan companies.Based on the analysis of mathematical models,this thesis puts forward the hypothesis theory of the threshold effect of default risk.That is,there is a threshold level of default risk.When the level is below or above the threshold level,the income and risk effects of loans are different,which makes significant changes in the relationship between loan structure and performance.The main reason is that the loan structure has a significant impact on the risk of default as well as on the performance.In empirical analysis,the thesis uses the panel sample data of small loan companies from Shandong province to carry out empirical tests.Firstly,we analyze the effect of loan structure on performance without considering default risk factors.Secondly,we further join the risk factors,and examine the existence and effect of threshold effect from default risk.Finally,the thesis examines the effect of loan structure on default risk in order to explain the reasons behind it.The main conclusions are as follows:(1)If default risk factors are not considered.There is a significant linear positive correlation relationship between loan interest rate and performance,and raising interest rate can effectively increase the performance of small loan companies.(2)Consider the threshold effect of default risk.For the loan interest rate,the higher the better,when the default risk reaches the threshold level above,increasing loan interest rate will no longer have a positive effect on performance;As for the loan amount,on the one hand,the inverted u-shaped relationship between single loan amount and performance is always present regardless of how the default risk level changes.On the other hand,when the default risk increases beyond the threshold level,the increase of single loan amount has a significant negative effect on the performance of small loan companies.These two points fully explain that the larger the loan amount,the more unfavorable the small loan company increases the income;For the loan maturity distribution,the relationship between medium-long maturity loan ratio and performance is not affected by default risk level,and there is always a negative linear relationship.However,the impact of short maturity loan ratio on performance shows a significant default risk threshold relationship,that is,when the default risk rises to the threshold level,the relationship between short maturity loan proportion and performance has a significant negative correlation changed from the original significant positive correlation.(3)The loan structure has a significant impact on default risk,and the effect is also related to the default risk level of borrowers.When the default risk is low,raising the loan interest rate and increasing the short maturity loan ratio can effectively reduce the default rate.However,when the risk of default rises to the threshold level,the loan interest rate,loan amount and short maturity loan ratio are significantly positively correlated with the default rate.And the medium-long maturity loan ratio always has a positive correlation with the default rate.Therefore,the influence of loan structure on default risk also explains the threshold relationship between loan structure and performance.Based on the previous research achievements,the thesis has improved and perfected continuously,and realized the following innovations:Firstly,from the perspective of research,the thesis is not limited to the study of external and macro factors,but also explores the relationship between loan structure and performance from the micro level.And the theory of default risk threshold effect is put forward from the point of risk;Secondly,on the research content,the thesis chooses the three kinds of loan structure that best reflect the characteristics of small loan company's loan structure.For the first time,it systematically analyzes the influence mechanism of different types of loan structure on the performance and risk of the small loancompany;Thirdly,in terms of research methods,the theoretical analysis of the thesis starts from the characteristic phenomenon and abstracts the general rule of things,and puts forward the mechanism of the loan structure of small loan companies to the performance.The mathematical model is constructed to carry out and improve the theoretical research level of this thesis.The empirical analysis selects more scientific econometric models,in accordance with the empirical test through a way of thinking,and fully reveals the relationship between variables based on the empirical test method.It proves the existence and rationality of the hypothesis of default risk threshold effect;Fourthly,in terms of research and application,the thesis applies information asymmetry theory to analyze the mechanism of small loan company's loan structure,especially reveals the relationship between loan structure and borrowers' default risk.This is not only a typical feature of the incomplete information in the small credit market,but also an extended application of the theory.The research findings and conclusions of this thesis can make up the gap of the existing theoretical research on the loan structure of microfinance market to a certain extent.From the perspective of credit technology,it supplements the research on the factors affecting the management performance and loan default risk of small loan company.This will not only help us to correctly understand the characteristics and influence effects of small loan company's loan structure,but also have important practical significance in improving company profitability,promoting the steady development of industry and helping regulators to make policies.