Study On Credit-risk Evaluation Method For Chinese SMEs

here is a quantity of small and medium-sized enterprises (SMEs) in China, but many problems such as information asymmetry make the SMEs suffer financing predicament. To change this disadvantageous position in the financing activities, it must strengthen the construction of credit system, especially credit rating system for the SMEs, and it is a kind of effective mechanism to solve the information asymmetry and the related problems for SMEs. A suit of technique and method of credit rating of SMEs which is scientific,integrated can make the credit banks and rating institutions judge the credit levels of SMEs accurately, then provide the important reference for the credit support which bank offer to enterprises. However, there is a lack of a suit of technique and method of credit rating which is compatible with native SMEs in China. It restricts the development of Chinese SMEs seriously. Therefore, it is a problem which need resolve urgently to establish a suit of evaluation index systems and models that is integrated,scientific and compatible with Chinese SMEs.Compared with large enterprises, the SMEs have their own characteristics, so we should establish the credit evaluation index system and model of SMEs not only based on existing evaluation index systems and models but also based on the characteristics of SMEs. this paper begins with the related theory of the SMEs and the credit risk evaluation, according to the characteristics of Chinese SMEs and use the existed domestic and foreign credit evaluation approaches and credit rating models for reference. The paper establishes a suit of evaluation index system which is able to reflect the SMEs' credit roundly and factually from six aspects, i.e. industry situation,basic operation and competition of enterprise,management,financial appraising,external supports and former credit records.As for the choice of the method of the SMEs' credit risk evaluation, foreign experts inclined to the multivariate statistical method but Chinese SMEs' quality of accounting information is lower, and it is hard to obtain the financial data of the bankrupt enterprises, so it is difficult to form a valuable statistical model. Therefore, it chooses some financial and non-financial indicators which could influence the credit quality of the enterprises as factors, and investigate them by weight, setting a credit risk evaluation method for SMEs which combined the experts' judgment method and credit mark method to determine the credit quality for Chinese SMEs. Firstly, it sorts the SMEs according to scales and industry, and bases on the moody's RiskCalc model to select the quantitative indexes. Then it uses analytic hierarchy process (AHP) rating model to calculate the weight of each index, and marks the indexes in the model according to the actual situation of the enterprise. Finally it investigates the indexes which are excluded in the new model but may influence the credit quality of the enterprise and adjusts the score to determine the corresponding credit rating.