Research On Enterprise Risk Management Of State-owned SME Credit Guarantee Companies

With the deepening of China’s reform of the financial system, China’s SME creditguarantee industry develops into the stage of regulation and rectification. Enterprise riskmanagement could help the state-owned SME credit guarantee companies to improve thelevel of risk management. The SME information asymmetry and the risk transferred fromfinancial institutions constitute the external risks formation mechanism of state-ownedSME credit guarantee companies. The state-owned capital principal-agent relationship andthe manager moral hazard constitute the formation mechanism of the internal risk. The riskforming mechanism determine the four strategies to build a state-owned SME guaranteecompany’s ERM framework, including that SMECG companies open up channels ofinformation, contribute to the risk-sharing with financial institutions, strengthen theinformation collection, transmission and evaluation capacity, improve the performanceappraisal and internal control. Then, combined the four strategies, according to ERMelements, Company A is analyzed as a case. At last, an ERM optimizing solution is given,which covers the stockholders structure, the organization structure, the projects riskappraisal index system, information system and outside environment. A case study ofcompany A is to prove the feasibility of a similar credit guarantee company riskmanagement. We hope this study could help to enhance the level of risk management forthe state-owned SMECG companies under the new situation.