A Study Of The Credit Model For Small And Medium-sized Businesses

SME credit issues have increasingly become the focus of attention in recent years. The main reason and motivation lie in the fact that, with the acceleration of the process of financial reform, the gradual liberalization of financial markets, the gradual formation of market-oriented mechanisms of interest rates, the competition between financial institutions and the banking industry is becoming more competitive. Commercial banks in China always prefer big clients, however, with the development of financial markets, the financial channels for large-scale enterprises are gradually increasing to such an extent that the competition for large customers between commercial banks has reached a heated level with highly competitive costs but low earnings. The business model that commercial banks take large enterprises and groups as the main source of revenue has been under attack so greatly that banks are forced to find a new profit growth point. Since 1998, the People's Bank of China has successively issued many policies. Under the promotion of the above policies, a study on small and medium-sized credit issues is becoming increasingly urgent.Many previous studies focused on the reason analysis of financing plight of small and medium-sized enterprises or on the simple application for the financing model of developed countries. Few studies put an emphasis on the analysis of credit models of small and medium-sized businesses which can suit china's economic development and underdeveloped areas. This study may, to some extent, fill this gap.By comparing the credit models of small and medium-sized businesses between Chinese and foreign commercial banks, the thesis, based on the actual situation in China and the useful experience of foreign countries, explores the causes for credit crunch from the perspective of commercial banks so as to establish a harmonious and feasible credit mode for SME of commercial banks. In this way, their operational risks can be prevented and controlled to maximize the value of their own.The thesis is composed of six parts. The first part is introduction which tells the background and importance of the topic, as well as research methods. The second part is a domestic and international literature review of credit mode for SME, which not only has a systematic and thorough analysis of both domestic and foreign credit modes for SME but also discusses inadequacy of these researches and the relevant improvements on them. The third part compares different credit modes for SME at home and abroad as well as those of commercial banks in Suqian, mainly about their characteristics, applicability and economic characteristics of Suqian as well as some measures and applications taken by other commercial banks on credit status. The fourth part is about the creation of a credit model for small and medium-sized businesses based on Temasek model. This part is the focus of the topic, discussing almost all the procedures of credit modes such as customer marketing, product selling, credit rating, portfolio and post-lending management. The fifth part gives an introduction to the present achievements and advice for promoting that mode. The last part is conclusion and inspirations.