Research Of Commercial Bank On SMES' Credit Risk Management

Along with the unceasing development of China's market economy, the small and medium-sized enterprises have been playing more and more important role in the market. The small and medium-sized enterprises (SMES) account for more than 60% of the GDP, and offer a wide range of jobs for the society. The important position of small and medium-sized enterprises in our country's economy is obvious. However, SMES urgently need commercial bank loans in the process of development. The difficulties to finance for SMES are becoming more and more prominent. Commercial banks are facing with a greater risk on loaning to SMES. Therefore, they do not show much willingness to loan to SMES.Banks also have some limitations and constraints. On the one hand, banks are cautious about the loans. On the other hand, the small and medium-sized enterprises have requirements for loans. Under this background, how to control the credit risk for SMES is an urgent problem to be solved. Effective credit risk control for lending is good for both sides. The author worksfor a commercial bank, and often contacts with the small and medium-sized enterprises. This article will combine with the industrial and commercial bank of Chongqing branch where the author works for. According to the actual situation and long-term goal, this article will research the small and medium-sized enterprise'scredit risk control problems, hoping to provide the necessary support for healthy development of the credit business of commercial banks and provide a useful way of easing the financing difficulties of small and medium-sized enterprises. Based on the related theory of SMES credit risk, this paper highlights the risk of small and medium-sized enterprise credit business, and finds out the existing problems when SMES carries out the credit business through the comparison with the large and medium-sized enterprises credit business. Finally, the author combines with his/her own work experience and takes the Chongqing Branch of the Industrial and Commercial Bank as an example to analyze the credit risk of small and medium-sized enterprise. This paper combines with the practical work to propose some recommendations for controlling the small and medium-sized enterprises credit risk from the theoretical and practical perspectives. This paper not only provides reference for commercial banks to carry out the small and medium-sized enterprise credit business, but also can explore some reasons for the financing difficulties to better help small and medium enterprises to solve the problem.This paper is divided into six parts. The first chapter is introduction part, mainly introduces research background, research significance and research ideas. And then the author reviews the related subject of research literature at home and abroad. This part laid a theoretical foundation for the paper. The second chapter gives a summary of SMES credit risk of commercial banks and gives a definition of the small and medium-sized enterprises (SMES). What's more, it conducts a comprehensive sort of relevant risk management theory to provide theoretical support for subsequent phases of actual case studies. Chapter three analyzes the SMES credit risk control status quo of Chongqing branch of Industrial and Commercial Bank, combined with the latest data for small and medium-sized enterprise credit. This is one of the most important section of the whole article and provides the data support. Chapter four analyzes the existing problems in credit risk control and reasons. This chapter mainly classified the problems existing in the development of credit business of small and medium enterprises in Chongqing branch of industrial and Commercial Bank of China, such as the laggard of internal organizational structure and credit management system, the imperfect loan risk control mechanism, and the over-reliance on the traditional mode of capital management and security. Chapter 5 illustrates the specific measures to improve the credit risk control of small and medium enterprises. Onthe basis of the analysis of SME credit risk in Chongqing branch of industrial and Commercial Bank of China, it puts forward specific measures to improve the credit risk control of SMES. The sixth chapter is the conclusions of the full text. This research attempts to effectively control the credit risk to promote the development of the small and medium-sized enterprises at the same time and to achieve effective management of credit business risk in commercial banks.