Research On Credit Risk Assessment Of Small And Micro Businesses

The mass number of small and micro businesses in China play a key role in enhancing economic development, promoting employment, encouraging innovation, maintaining market vitality and protecting price systems. At the same time, the existence and development of Small and micro businesses are challenged by financial dilemmas, which are often the results of less funds for mortgage, less creditable accounting records and lack of credit records.The paper defines the-small and micro business and makes an evaluation on many factors that contribute to the possible of credit risk. Based on various analyses on financial risks, the paper introduces the feature of firms and industries into the analytical framework. With the establishment of representative evaluation system, the paper attempts to build a new risk evaluation system.The paper has6chapters, with the logic of problem finding, analyzing and solving. The1st chapter describes research background, significance and puts forward research framework. The2nd chapter defines small-mini enterprise, and reviews the key features and influencing factors in their credit risks. The3rd chapter puts forward the problems in credit risk evaluation, including, lack of credit risk evaluation system, paying too much attention on in-sheet factors; paying too much on debt-clearing ability but not willing, lack of investigation on trade reality. The4chapter analyzes the principles and necessities credit risk evaluation system. The5th chapter establishes the credit risk evaluation strategies. It selects quantitative and qualitative indexes based on case study. The major indexes include solvency, profit-making, operation and growing, real-controller, firm quality, industry feature, etc. The6th chapter concluded with some suggestions for further study.The operation and financial feature for Small and micro businesses is crucial for identifying credit risk and influencing factors during their growth. The scientific small and micro businesses credit risk evaluation indexes system will help the design of financial products, extending credit and other policies of financial institutions. The paper attempts to bring some new thoughts in solving financial difficulties for small and micro businesses, enriching the credit risk management theory.