Study Of Loan Pricing In Small And Micro Enterprises

With the rapid development of our market economy, the small and micro enterprises are increasingly growing. As the backbone of our country economy, the small and micro enterprises can fit the changes of market, showing the vitality. But due to limited strength of small and micro enterprise, such as the restrictions of operating direction, the fuzzy strategy, the limitation of management ability and the lack of property which banks can accept, in spite of the strong momentum of development, commercial banks often have misgivings in lending to small and micro enterprises, and the financing needs of small and micro enterprises are far from meeting, which has restricted the development of small and micro enterprises. Especially in recent years, small and micro enterprises suffer from the impact of the external economic environment, which further compresses the already low profit margins, increases the difficulty of financing and financing costs, exacerbates the difficulty of the operation of small and micro enterprises.In order to enhance the competitiveness of small and micro enterprises gaining loans, while maximizing the operational efficiency of the bank, it is necessary to optimize the allocation of funds for banks aiming at the characteristics of the domestic small and micro enterprises loans, continuously improving the scientific loan pricing mechanism, thus improving the bank’s management level. Through continuous improvement of loan pricing mechanisms, the bank can improve their independent operating system, gradually to meet the requirements of the market economy. Therefore commercial banks need to think about how to innovate loan pricing model.This paper firstly introduced the background and purpose of small-micro enterprises’ loan pricing, and summarized the domestic and foreign related literatures. Through the establishment of scientific and rational loan pricing policies, it is helpful for bank to resolve the obstacles of small and micro enterprises gaining loans, and promote the rapid development of small and micro enterprises, as well as conducive to the expansion of small and micro enterprises finance business, more conducive to the healthy and sustainable development of national economy.Then, the paper described the basic theory of the loan pricing, introducing the definition of small and micro enterprises, and small business loan pricing mechanism. The paper also sums up the problems existing in the small and micro enterprises loan pricing mechanism, that is, the lack of market-oriented benchmark interest rate, the weak capacity of bank’s risk pricing and management, the lack of loan pricing model’s practical operability, the mismatching of the source of funds and loan’s application, and the industries and geographic differences in loan pricing problems. Then these problems were put forward for the corresponding solutions.Next, the paper reviewed the basic loan pricing models, including cost-oriented pricing, market-oriented pricing, customer-oriented pricing and RAROC-based pricing. Then specific parameters in the model were determined, containing the loan based costing, target profit, the risk premium, as well as adjustment factors.At last, the paper combined with the actual situation of the small and micro enterprises with the comparative analysis of these types of pricing models, this paper presented RAROC-based pricing well fit the loan pricing towards small and micro enterprises. Taking into account the impact of macro-control policies on small and micro enterprises is particularly evident, it can’t just choose a cost-oriented pricing model; while China’s currency market is not mature enough, so it isn’t appropriate to adopt market-oriented pricing model as the dominant method; customer-oriented pricing model has certain advantages, but the design is not comprehensive enough. Using the principle components analysis theory and cluster analysis theory, we calculated the credit risk level and the probability of default. Then we use a case to demonstrate the model’s feasibility and effectiveness.