Small And Medium-size Enterprise Credit Guarantee Risk Pricing

China Credit Guarantee has more than20years of development since the firstCredit Guarantee Corporation have been established in1993.In the background ofChina to vigorously support, SMEs, China Credit guarantee agencies has developedmore than5,000homes, and the proportion in the amount of credit guarantee whichcame from the SME Credit Guarantee is climbing. The development of SME creditguarantee institutions play a important role in promoting greatly China’s commercialbanks’ reluctance to credit crunch and fear loan phenomenon, lowing the threshold ofSME debt financing, enhancing and improving the level of commercial credit scalefor domestic financial structure.However, our SME credit guarantee institutions, especially commercial creditguarantee agencies, does not have a standard, universal service fees rule in the courseof doing business. For the development of the credit guarantee rates tend to be withinthe limit prescribed by the State, base on the customer’s experience and judgment orexperience to pricing, even with a same business in different fees charged by creditguarantee institutions also varied widely on. This is likely to cause confusiondomestic credit guarantee industry competition, more important is the lack of arational scientific pricing, especially credit risk pricing, which often makes creditguarantee agencies can not effectively cover the risks they faced.So, a method ofhow to price the credit risk has great significance of promoting China’s SME creditguarantee institutions sustainable development and scaling, This is exactly thepurpose of this article topic.There are many methods on credit risk pricing, and the range to various types ofcredit risk is also very wide. Based on existing research scholars at home and abroad,and the credit guarantee risk characteristics, and our SME credit guarantee featuresof commercial operations and risk management, using VaR (Value at Risk) method tocombine risk and credit guarantees, establishes a universal way in credit risk pricingfor our commercial credit guarantee institutions, and to explain with case at last.Through the discussion of this article could be able to provide a risk-based pricing reference standards and reference for domestic SME credit guaranteeinstitutions.