Credit Pricing And Decisions Based On Customers’ Credit Risk Assessments

With the rapid development of economy and increasingly frequent financialactivities, credit transactions have drawn attention and research from peopleincreasingly. Under the poor credit status of current market, credit tradingmechanism needs to meet the needs of economic environment, and the efficiencyof the credit depends on social ideology and the level of supporting from itssuperstructure. Credit belongs to an investment capital with low cost. It canbecome a valuable asset of enterprises, groups and individual persons, and it canbring a lot of added value.At present, some of China’s enterprises are under the status of "selling oncredit means playing the fire, no selling on credit means waiting for death". On theone hand, the market competition is becoming increasingly fierce, so the creditsale party needs to provide affordable prices and other preferential conditions tothe credit purchase side so as to check in order to improve the occupation rate ofmarket. On the other hand, the customers have poor credit, and they often defaultthe payment with various pretexts. Although debts should be paid, in fact there aremany embarrassing situations, such as can’t find the credit purchase party,difficult to ask for payment, and looks pale. Therefore, the majority of enterpriseshave to pay huge collection cost, coupled with the status of lack of, experience ontechnology management, it often produces a lot of bad debts, resulting in the stopof normal functioning of the economy, which is seriously affect the country’snormal economic order.In view of the status of poor credit management in our country, this papertries to learn from foreign advanced ideas, and gets inspiration from the credittheory and credit history based on national conditions, in order to solve the creditproblems.(1) It mainly introduces background, significance, literature review, researchideas and methods of the study, in order to provide the base for the followingresearch.(2) It makes an analysis of the basic theory for the credit problems, to explorethe relationship among construction of customer credit evaluation index system, thecredit sale cost, credit sale pricing and customer credit evaluation.(3) It makes formula derivation for the characteristics of two share options inthe credit sale business, discusses the default probability of core variable, andfinally constructs more reasonable default probability model under Chinese marketenvironment. It puts forward the corresponding theory of share option, analyzes the relationship among the credit sale cost, collateral value, volatility of collateralvalue, risk-free interest rate and credit sale pricing, and determines the range ofcredit sale pricing.(4) It is committed to the determination of goals of credit sale decision and thecredit sale decision set, substitutes the scope of credit sale pricing confirmed in thethird chapter into the constraint conditions, and at the same time constructs themodel under the confirmed credit sale targets through using the quantitativerelation between parameters of decision set and obtained relevant data. Finally itconfirms the decision set to provide policy recommendations for credit sale.(5) It makes analysis of credit sale based on the risk evaluation of customercredit. It selects the financial data of WIND Textile Industry Listed Company, andcarries on the quality classification for credit levels with the method of SVM.Because the credit sale business involves the enterprises’ commercial secret, thispaper only calculates the decision factor in the fourth chapter through thesimulation data.(6) It provides suggestions of credit sale decisions based on the risk evaluationof customer credit. It also makes analysis of the credit sales targets, rationalizationof constraints conditions, profit ratio risk of credit sale, and situation of credit saledecision for line of credit allocation of multiple customers, to put forwardsuggestions about the rationalization of operation of credit sale decision.(7) It sums up the difficulties and shortcomings encountered in the study, andit also estimates the prospect of credit business.