Research On Supply Chain Financing Business Credit Risk Evaluation Of Commercial Bank

Financial financing business in China’s supply chain practice originated in1999,with the increasingly improved of China’s financial markets, Logits, capital flow andinformation flow integration of collaborative service innovation management hasbecome more sophisticated, banks are also increasing emphasis on the productdevelopment of supply chain financing. The financial business of the supply chain caneffectively solve the difficult problem of SME financing, evaluating the credit risk ofthe financing of corporate,the banks are not only examine the level of financingbusiness credit risk, but also considering the characteristics of the supply chainfinancing.With the commercial banks launching of the financing business, how to properly,scientific and reasonable evaluate the supply chain finance credit risk of financecorporate has become an urgent problem. This article focused on the analysis fromfour aspects, they are the development status of the supply chain financial operationsin China, risk factors of the main modes of supply chain finance business, credit risksand Evaluation Index System and Evaluation Model.Paper uses the Logit model to empirical analysis, and on this basis, the DefaultDistance from the KMV model to optimize the Logit model in order to higher thecredit risk accuracy of the supply chain financial. Finally, the paper proposes targetedrisk management recommendations of supply chain financial credit.The paper firstly reviews the background and significance of the supply chainfinance, the meaning and characteristics of the Supply Chain Finance Facility, and thedifferences between the traditional financing business and the supply chain financebusiness. Then introduce the supply chain financial credit risk management theory,such as game theory and contract theory.Secondly, the paper describes the policy and economic environment of thefinancial business of the supply chain, the development status of the supply chain finance business practices which commercial banks conducts in China’s. There arethree main types of supply chain financial services, they are accounts receivablefinancing,confirmation warehouse financing and warehouse financing ofaccommodations. Article introduces and analysis the three basic modes of supplychain financing business banks generally carried out. Then it summarizes thefinancing business credit risk aversion, and noted credit risk factors of the financingbusiness.Third, the article analysis the business model of supply chain finance, selects therelevant indicators to establish the credit risk evaluation system of the supply chainfinance. The index of the system consists of four aspects, which are financingenterprises, the core enterprise, supply chain relationships and supply chain financingmodel. These indicators are the combination of qualitative and quantitative indicators,financial and sub-financial indicators.Fourth, the paper selects33indicators, and uses the factor analysis to select keyindicators, then uses the Logit model to the empirical analysis of the credit riskevaluation. Paper gets the key indicators of the impact of financing corporate creditrisk, which are finance business operations ability, profitability, short-term solvency,return on net assets of the core enterprise, the supply chain relationship quality offinancing enterprises and core enterprises, alternative financing enterprise products,the prices inflated risks and financing companies breach of contract. Finally, the papercompares the credit risk evaluation model of supply chain finance business with thetraditional model, and gets conclusions that the credit risk evaluation model of supplychain finance business is much more precise.Fifth, the paper uses the distance to default in the KMV model to optimize thecredit risk evaluation model of supply chain financing business. Specifically, this partuses the distance to default which are the KMV model derived as the explanatoryvariables for regression analysis, and then measure the credit risk using the Logitmodel. From the results, the distance to default is a good explanatory variable in thelogit model, and KMV and Logit mixture model-based credit risk assessment accuracy. With the hybrid model of KMV and Logit，the model gains the highestaccuracy of the credit risk evaluation.Sixth, according to empirical results，we propose related suggestions about SCFcredit risk management for China of commercial bank supply chain finance. Theproposal has two aspects, one side is credit risk assessment supporting facilities andthe other is credit risk prevention and control.