Credit Rating Model Evaluation And Construction Of China’s Rural Small And Medium Banks

With China’s financial system reformgoesdeeper and the process of marketization moves forward, the county’s rural small and medium banks, as the financial services provider for the majority of small and micro customers will inevitably play an important role in the process of economic transformation. However, many rural small and medium banks have suffered from the high rate of non-performing loans, low asset quality as well as the lack of effective identification and prediction methods and tools of customer default risk, the paper sets the establishment of rural small and medium-sized bank credit risk measure and rating system as a starting point to explore China’s rural small and medium-sized bank credit risk management methods.First of all, on the basis of all the method involved in all kinds of small and micro customer credit evaluation index systemsboth practically and theoretically, thepaper establishes a sound Credit indicators library for small and micro customer. Also based on this credit indicators library the paper has constructed a comprehensive evaluation index system for individual industrial and commercial households of Rural Commercial Bank.Secondly, this paper has explored China’s small and medium-sized rural bank credit risk measurement and credit rating methods combined with the current domestic and international research frontier exploration, and conducta applicability analysis of the existing models to find thesuitable model for rural small and medium-sized banks in China. Moreover, on this basis the paper has tried to construct the hybrid model of credit risk measurement. With the use of the actual transactions data and credit information of Rural Commercial the small micro Customer credit and data of rural bank, the paper has testedthe following three models:logistic model, neural network method and the hybrid model and confirmed the hybrid model with both high prediction accuracy and predicted stability. Finally, according to the final prediction results of the hybrid model, the paper has developed and designedthe credit score card forthe individual industrial and commercial households Rural Commercial Bank and verified the effectiveness of the credit score card from the predictive accuracy and predictive cost.Default risk estimation method inthe study is not only applicable for the development of China’s rural commercial banks and credit rating system with high theoretical basis, but also has a strong practical significance enhancing credit risk management and controllevel for China’s rural commercial banks to.