Microfinance Credit Risk Management Research Based On Score Model

The international communities usually name the financial services providing to low-income people and micro and small enterprises those who do not fully receive financial services as microfinance, which in China often translated as micro-credit. Micro-credit was introduced to China to solve the "three rural" issue, however, micro-credit is not only serve the agriculture, but also serve the low-end customers who are beyond the reach of traditional financial institutions. Micro-credit as one of micro financial activities is a very important aspect to build inclusive financial systems.The characteristics and the service targets of the microfinance business determine its non-performing loan rate is usually higher than other loans, in addition, microfinance institutions often do not conduct business in the advanced credit risk management mechanism, the loan decisions often made by a relatively high degree of qualitative analysis, which resulting excessive lending caused by incentives of the loan officers, as well as different levels of loan officers result in different standards, and high operational costs caused by maintenance of a considerable number of loan officers. These problems make microfinance credit risk management necessary. If you can not effectively improve the level of micro-credit risk management, control the non-performing loan ratio, it is bound to hinder the healthy, rapid and sustainable development of micro-credit. Therefore, control of micro-credit risk, particularly credit risk, reduce bad loans, improve credit quality has become a very important task of micro-credit lending institutions.This article has a purpose of improving microfinance credit risk management, summarizes the development of microfinance in the history of our country, and the problems of risk management encountered in the development. Through the analysis of the international successful model, combines with practical work, this article gets a conclusion that credit scoring method is more suitable for evaluating the credit risk of SME loans. Then selects the indicators of credit scoring model, introduces AHP to determine the weight of each indicator. Then in accordance with the present situation and characteristics of economic and financial development of Chengdu, using this model to text local SMEs and individual industrial and commercial households' performance of credit scoring. Finally, this article summarizes the limitations and shortcomings of credit scoring model, and proposes optimal solutions.