Research On Credit Rating For Guarantee Agencies

Because of small scale, weak anti-risk ability, lacking sufficient collateral, the small and medium-sized enterprises are unable to get enough financial supports from commercial banks. The emergence and development of guarantee agencies have contributed to eliminating the risk of loan losses for commercial banks and raising their enthusiasm to provide financing services for small and medium-sized enterprises. Commercial banks and guarantee agencies make cooperation to provide new credit services for small and medium-sized enterprises. At of the end of2011,there were15997commercial banks cooperating with guarantee agencies. However the majority of commercial banks lack credit rating system for evaluating the risk of guarantee agencies, having to rely on subjective judgment and credit rating agencies. Some credit rating agencies do not perform their duties to make their ratings reflecting the risk of guarantee agencies correctly, hence commercial banks, should develop a accurate credit rating model for guarantee agencies and rate guarantee agencies by themselves under the guideline designed for guarantee agencies crediting rating specially.Foreign scholars haven’t researched on guarantee agencies credit rating, however researches on credit rating methodology and guarantee agencies operating situation are helpful for research on guarantee agencies credit rating. According to researches on guarantee agencies in foreign countries, guarantee losses and relationship with commercial banks and risk assessment system have significant impact on guarantee agencies operating situation. Credit rating methodologies have developed from qualitative to quantitative, from quantitative analysis to comprehensive evaluation, including expert analysis, Z-Score model, logistic model, neural network model, analytic hierarchy process, the modern credit rating model. Relevant researches in china focused on the risk of guarantee agencies and the design of credit rating model for guarantee agencies. The risks of guarantee agencies mainly originate from the external environment, internal management, business, substandard operating. Analytic hierarchy process has been used in credit rating for guarantee agencies to determine the index weight. The specific credit rating model for guarantee agencies vary from different scholars. Some scholars have achieved good results when using fuzzy comprehensive evaluation.In this dissertation, guarantee agency is defined firstly. Then this dissertation introduces some theories about guarantee agencies. From the perspective of asymmetric information theory, commercial banks get asymmetric information from guarantee agencies, leading to adverse selection problem. Basing on the theory of transaction costs, commercial banks rate the guarantee agencies are cost-efficient. The cooperation between commercial banks and rating agencies would lead to moral risk based on the principal-agent theory.This dissertation has introduced the present situation and problem about external credit rating work done by rating agencies for guarantee agencies.Most provinces in china carry out compulsive policy to persuade guarantee agencies to participate in external credit rating activities. Rating agencies have accumulated rich experience and problems in guarantee agencies credit rating. Their experience and problems are useful for commercial banks to rate guarantee agencies by themselves. Then the dissertation introduces how commercial banks rate guarantee agencies and evaluate guarantee agencies’risk. Only Industrial and Commercial Bank of China had developed a credit rating system for guarantee agencies, and using the rate to determine the cooperation policy for guarantee agencies. However the model developed by Industrial and Commercial Bank of China has many disadvantages because the model does not consider the characteristics of guarantee agencies. Other commercial banks don’t have guarantee agencies credit rating system, depending on experts’ experience to evaluate the risk of guarantee agencies.Differences between the operation of guarantee agencies and common enterprises are significant. This dissertation has researched on guarantee agencies’ special credit risk, including external environment risk, shareholder risk, management risk, business risk, financial risk, sustainable development risk. Basing on the characteristics of guarantee agencies’ credit risk, this dissertation has choosed external environment, shareholder background, human resources, internal management, business operation, risk management, compensatory ability, operating efficiency as core pillars for credit rating index framework. Twenty-seven indexes have been selected, including twelve qualitative indexes and fifteen quantitative indexes.Considering analytic hierarchy process has advantage in processing qualitative indexes and quantitative indexes, Yaahp-a analytic hierarchy process software has been used to determine the weight of indexes. Then the fuzzy comprehensive evaluation using the index weight constructs credit rating model.In2012,there were88guarantee agencies taking part in external credit rating in Wuxi. Twenty guarantee agencies have been choosed to evaluate the accuracy of guarantee agencies credit rating model developed in the dissertation. The rates calculated by the credit rating model developed in the dissertation mostly match the rates provided by three national credit rating agencies. The rates calculated by the credit rating model developed in the dissertation are lower than the rates rated by three regional credit rating agencies, which had been cut down drastically in the track rating process Hence credit rating model developed in the dissertation is applicable and effective.Lastly, suggestions had been given to users about how to use the credit rating model correctly and how to administrate the guarantee agencies credit rating processThe innovation of this dissertation is:The framework of the index system for guarantee agencies’ credit rating is based on the analysis of guarantee agencies’ credit risk characteristics; Analytic hierarchy process and fuzzy comprehensive evaluation have been used to build the credit rating model; More samples have been introduced to verify the accuracy of the guarantee agencies credit rating modelThe inadequacy of this dissertation is:The indexes reflecting the business risk are not adequate; Qualitative indexes and quantitative indexes are included in the credit rating model, the model can’t be quantitative completely.