Risk Management And SME International Financing

International trade financing is playing an important role in promoting worldwidetrading as well as development of Small or Medium Enterprises (SME). But in china,the banking system could not provide sufficient and effective support on financingSME. It is counted that90%of the Chinese enterprises are SME, earning68%ofex-import net income and burdened much more than large companies withtechnological innovation, management innovation management and market exploring.Nonetheless, SME reimburse higher expenses than large companies for financing. Inrecent years, trade financing services for SME spring out with increasing emphasis oncommercial banks to develop SME credit market. In the contrary, risk management ontrade financing for SME is of lethargy, and the traditional method mismatching newinternational trade models limited the development of trade finance for SME.Therefore, it is necessary to analysis the risk factors of SME international trade, useappropriate risk management systems and risk assessment methods to promoteinternational trade financing for SME.Trade financing are defined as low-risky business under hierarchy of loan systemwith short-term and small amount. However, due to the shortcomings of SME，speculative, credit default and lack of qualified staff etc., accompany with volatilityof the international trade market, complex international practice and law, SMEinternational trade financing are still quit risky. This article takes reference to relevantpapers and researches on SME international trade, outlines the present situation ofSME international trade, summarizing creation of commercial banks on tradefinancing services for SME and risk management practices. Using empirical methods,this article describes how to identify the customer exactly, build the risk alert systemand control risks, and based on the identification of the customers, clarify risks and modularize risk management. Contribution of this article is to establish a standardizedrisk management system, risk control activities to the enterprise, promotingcommercial bank to change risk management method from a simple financial-reportanalysis dependent into a system of three-dimensional including customeridentification, main risk monitoring and risk measurement. Feature of this article is toredefine the risk control assignment of the responsibility, in that commercial able tocontrol risk of EMS international trade financing actively, effectively and accurately.