Commercial Banks Of Small And Medium-sized Enterprise Credit Risk Control

As the eternal theme of the bank risk management, credit risk control has always been paid great attention by the commercial banks. Under the pressure of the financial disintermediation and the marketing of interest rate, banks now face a new topic that is how to control well the credit risk for medium and small size enterprises. The traditional credit risk control method could not meet the demand of banks to control the credit risk for large-scale, changing and small capital fund of those medium and small size enterprises. Because of this, this paper researches the way to better control the credit risk for medium and small size enterprises from the perspective of the supply chain finance.The first chapter of this paper mainly introduces the significance and background of the supply chain finance and finds out the difficulty lies in the information asymmetry between banks and enterprises and the high cost of bank risk control. The second chapter firstly introduces the basic theory and its connotation of the supply chain finance, and illustrates that the credit risk control for medium and small size enterprises should not view the medium and small size enterprises as the independent individuals, instead, as the medium and small size enterprises in the Industry chain cluster from the perspective of the industry chains combined with its upstream and downstream. With the differentiation of the risk control between traditional model and the model of the supply chain finance by the supply chain finance thought, this paper finds out the way to solve the problem of information asymmetry between banks and enterprises and the high cost of bank risk control. In the third chapter, this paper introduces the present situation of the medium and small size enterprises, and draws the conclusion that the supply chain finance could solve the trap in the credit risk control and illustrates that why there is problem in the traditional credit risk control by the analysis of credit5C. The fourth chapter focuses on the basic theory of the supply chain finance on the common links and methods of risk theory, supply chain finance control, key elements of supply chain credit of small and medium enterprises, financial risk control to illustrate how the supply chain finance to control the credit risk for mall and medium size enterprises, and finally discusses the influence of the Supply chain finance credit risk control. The fifth chapter illustrates the application of supply chain finance in the credit risk control in small and medium sized enterprises with the case studies of Pangang Industry and SAIC GM Wuling.The main contribution of this paper is to substantively control the small and medium-sized enterprise cash flow process and thus realize the effective credit risk control of the small and medium-sized enterprise by the existing technology through trade links with special design from the perspective of finance supply chain. That is to say that the core of risk control is the cash flow rather than the balance sheet and other financial statements. The shortcomings of this paper is that, there is the difficulty in the comparative quantitative analysis, because there is no openly available data as all kinds of effective information of supply chain finance in controlling risks analysis involves the bank’s core business secrets.