The Commercial Credit Risk Causes And Management Countermeasures Of The Small And Medium-sized Enterprise In China

The problem of small and medium-sized enterprises is a worldwide and permanent topic. In the20th century, small and medium-sized enterprises in the western developed countries and the area have made great strides in development. And in China, after the reform and opening, small and medium-sized enterprises have been mushroomed, and debuted in each region of our country, and have become a force to the impetus of the development of the market economy in our country. However, the protean market environment is an important challenge for the enterprise to keep stable business operation, especially for the small and medium-sized enterprise, weak credit risk management ability is one of the main difficulties which obstruct the medium and small enterprises to going concern. Therefore, how to effectively assess and control the business credit risk, and trying to make small and medium-sized enterprise income maximization and strengthening the development potential, decide the management success or failure of small and medium-sized enterprises. In the development of such serious situation, in-depth exploration of the small and medium-sized enterprise credit risk management and credit system construction are of great theoretical and practical significance.Currently to see the development situation of market economy, credit economy has become the main form of the modern market economy. Then, the credit risk management apparently becomes the main work of the enterprise management, and it is the essential condition for the enterprise to exist and survive in the competition environment. However, China’s overall credit management level is low, especially to small and medium-sized enterprises, credit risk control ability is not enough, and it seriously restricts the development of market economy in China. In our traditional enterprise credit management system, the state administrative intervention and plan was the leading credit transactions in the entire market enterprise, these systems seriously distort the normal enterprise credit and sell on credit relations. After our country realized the change from the planned economy to the market economy system, the credit risk is more serious, which exists in small and medium-sized enterprises, because of small and medium-sized enterprises’ own weak risk awareness and the shortcomings of management ability. Credit defaults and the improper selling on receivable have become a serious threat to the stability of the small and medium-sized enterprise management. But receivable defaults in essence are the credit risk management issues. External business environment and the enterprise internal risk management are two factors which decide the size of the enterprise credit risk, while its own risk prevention and control is on the dominant decisive position, to some extent, high credit sales amount and high credit risk are from the weak credit risk management ability of the enterprise.This paper, based on the review of the current research status to the domestic and foreign relevant enterprise credit risk management, first of all, defines the small and medium-sized enterprise of defined. Then, after the analysis of the small and medium-sized enterprise’s characteristics of the foundation, it identifies the important role of the small and medium-sized enterprise in national economy, and expounds credit risk causes of the theoretical basis about small and medium-sized enterprises. Among them, the credit risk management theory introduces the enterprise credit risk recognition, measurement and control, and the scientific management method which minimizes the possibility of credit risk loss at a reasonable cost. The information asymmetry theory, on the financing of small and medium enterprises, introduces information asymmetry in the main performance through three aspects, these are small and medium-sized enterprises’ reliable information about the actual cost and income before carried on the financing investment project, small and medium-sized enterprises’preference after carried on the financing investment project, and the information asymmetry about small and medium-sized enterprises’actual profit ability which result in the adverse selection and moral hazard. The none-cooperative game theory introduces the special game between banks and small and medium-sized enterprises. Utility theory introduces the risk of aversion type, the risk neutral type and the risk preference type. Under these types, the small and medium-sized enterprise faces different credit risk condition. Financing order theory suggests that enterprises shall firstly try to use internal funds, followed by debt, the last is issued equity financing, yet most small and medium-sized enterprises did not listed, and do not have a securities market information transmission mechanism, so it is difficult to the financing order theory to explain all financing problems about small and medium-sized enterprises. Secondly, according to the characteristics of the small and medium-sized enterprise risk, this chapter analyzes the causes of the small and medium-sized enterprise credit risk respectively from two aspects which are the external and internal causes. Again, by the way of the list, this chapter respectively introduces the three advanced methods of foreign credit risk management, and explains those examples in detail. At last, according to the theoretical basis and the internal and external causes of the analysis results, this chapter finally puts forward some specific measures to the small and medium-sized enterprise credit risk prevention and control. Namely, after strengthened to its own functions and perfected the credit management system, the small and medium-sized enterprise should take advanced technology to the credit risk management and available external means. It also should prevent and control the credit risk of small and medium-sized enterprises from the point of view of the whole.