Research On Credit Default Behavior Of SMEs Based On A Commercial Bank Credit Data From Hunan Province

As the major force of economic growth, SMEs play an important role inexpanding employment, adjusting industrial structure and changing economicdevelopment model. However, as the increase of SMEs number, financing difficultproblem can’t be solved, which has hindered the health development of SMEs.Among all factors, High default rate is a main reason that SMEs can’t get enoughloans. Therefore, it is important for SMEs development and economic transition tofind the causes of high default rate of SMEs and deal with it.Firstly, this paper will study default theory of SMEs, including default, defaultprobability, the definition of SMEs, the SMEs credit characteristics, informationasymmetry theory, soft budget constraint theory, enterprise value theory andmacroeconomic theory. Secondly, I will analysis the cause of credit default of SMEsfrom different aspects and compare linear discriminate model, Logit model andcomposite model. In the end, I will choose SMEs with or without credit default recordfrom2008to2013as the research abject, which come from a commercial bank inHunan province. In order to ensure the results accuracy, I will firstly choose defaultand normal SMEs as experiment group, including qualitative indexes and quantitativeindexes. Then I will choose sample from incomplete qualitative data as control group.Next，using Binary Logistic model to analysis different samples and comparequantitative factor model, qualitative factor model and comprehensive factor. I findqualitative index has a stronger ability to recognize the credit default thanQuantitative indicators; Experience of business owners and the annual sales revenuegrowth can be stronger to recognize credit default. According to the empirical results,this article will put forward the solution to the small and medium-sized enterprisecredit default separately from the perspective of Banks, businesses and government.The innovation of this article mainly includes two points:(1) the raw data of thispaper is from a commercial bank in Hunan province. Therefore, the result is the trueresponse of SMEs credit fault in Hunan province. While less study of Hunan provinceSMEs credit default in the previous literature. Therefore, this article studies canprovide policy Suggestions for the government of Hunan province and banking sector.(2) In terms of SMEs credit default protection measures, legal guarantee and creditguarantee system are deepened and added.