Credit Risk Management Of Small And Medium-sized Enterprises Perspective Of Internal Audit Of A Commercial Bank

Credit risk management is considered as the core of the global financialmarket risk management. Under the shadow of globalization,35years old China’sfinancial market is facing a great challenge.In2008, the global financial storm triggered the alarm of a great risk forChina’s economy and even the global economy on the credit risk. At the sametime due to insufficient funds of our country’s small and medium-sizedenterprises, small scale of its development, research and development capabilities,and characteristics of the core technology, which is inferior to large enterprises,put them deep in financing difficulties. At the same time, China’s commercialbanks also face can not be accurately on the credit risk of small and medium-sizedenterprises to make accurate judgments, so evaluation and management for thesmall and medium enterprises credit risk became the focus of China’s banking riskcontrol.This article starts with discussing the theory of credit risk management andinternal audit, introducing the causes of small and medium-sized enterprise creditrisk and characteristics, then the introduction of the functions, definitions, andframework of internal audit and at the end points out the relationship between theinternal audit and the credit risk management.Domestic research on credit risk measurement model has only just startedand due to the facts that the research is still in its earlier stage while there isvigorous development of small and medium-sized enterprises in our country, thereis a grooving contrast between the model and the actual credit risk management.Therefore enhance the level of small and medium-sized enterprise credit riskmeasurement is particularly important.Through referring a large number of literatures, one can summarizes andinduces the current popular four credit risk measurement models.KMV company’s KMV model,J.P. Morgan’s credit measurement models (Credit Metrics Model), Suisse Credit bank Credit Risk+model,McKinsey’s ‘Credit Portfolio View’ model.Considering the advantages and disadvantages of above models against thepresent condition of our country’s economy, KMV Company’s KMV model can beselected as the research object. because of the small and medium-sized enterprisesexists in the country have below characteristics.Less credit amountThe particularity of high frequencyShort time limitFurthermore it is required to do empirical analysis to improve the correctnessof KMV model.According to above discussion the prevention and control of credit riskmanagement puts forward three Suggestions:1. Strengthen Prior Control of commercial banks SME credit business2. Strengthen the Control of commercial banks SME credit business duringthe business3. Strengthen Afterwards control of commercial Banks SME credit business...