Research On SME Credit Risk Management Of Bank Of China

With the quick development of china’s economy and gradual completion of market economy, the quantity and quality of small and medium-sized enterprises (SMEs) of China have kept improving and the promoting effect of SMEs for economy and the importance in social development have become increasingly obvious. However, during the development of SMEs, there are still many restrictive factors. The most typical problem is difficult financing. Commercial banks also encounter with increasingly fierce competition during the development process. It is not only a development chance and state policy guidance but also a business development opportunity for commercial banks to adjust the credit structure and adapt to the credit demands of multiple SMEs. In this paper, we take the credit management of SMEs of Bank of China as the example and explore credit risk management theories and methods based on the actual conditions of Chinese commercial banks and the satisfaction of the credit demands of SMEs by combining the characteristics of Chinese SMEs and the features of credit risks. It aims to offer certain references for other commercial banks when handling the credit risk management of SMEs by giving suggestions to credit management of SMEs of Bank of China.This paper mainly takes the SME credit risk management of Bank of China as an example and concludes that SME credit market environment and client demands are continuously developing and the financial service market of SMEs is in a continuously rising stage based on the analysis of the current development situations of theory and practical of risk management of commercial banks and by combining the characteristics of Chinese SMEs like abundant quantity, wide distribution, small scale, incomplete financial structure, high elimination rate and default, lack of standardization of financial management, and excessive influence of owner on the operation management of the enterprise. According to the actuality of SME credit risk management of Bank of China, this paper analyzes the highlights and specific countermeasures in SME credit granting management and stresses the execution of focal management and system completion in the front, middle and backstage of business. Furthermore, trend analysis and strategy optimization have been carried out by relying on multidimensional data statistics and analysis presentation decision-making support facing front and back ends to continuously and dynamically prevent and control the risks, thus realizing risk and return balancing and supporting the development of SMEs as well as creating values for banks. Meanwhile, the paper has proposed a general design idea for SME credit products of Bank of China and risk control attentions of SME credit risks of Bank of China through the analysis on the key points of SME credit risks. Also, it has put forward countermeasures to improve the SME credit risks of Bank of China. For example, carry out screening processing of enterprise data, adopt modern credit risk assessment system and techniques, adopt slow release management, and strengthen the management of low-quality and specifically highlighted clients. The paper has specifically pointed out the trend and importance of implementing SME credit product innovative risk value management. Besides, since commercial banks have comparative advantage for cash flow management over the clients, they may propose credit schemes that are "acceptable" for both clients and banks and can realize mutual benefit and win-win situation for the two parties by selecting these management advantages from the perspective of risk management through the crossing verification and management of cash flow horizontally and vertically and the combination of settlement model and financial data, thus not only quickly satisfying the urgent financing demands of enterprises in business demand but also obtaining business development of commercial banks under relatively low risks.They are also main innovative points of this paper as to deeply discuss how to solve the problem of difficult financing of SMEs of Bank of China and solve the general problems of SMEs through reasonable risk management mode and product innovation ideas. Avoid rigidly adhering to formality for the credit granting of SMEs, since the market keeps changing. SME risk management model suitable for the demands of SMEs and business development demands of banks have been proposed based on the views and ideas of this paper.