Research Of Optimising Credit Risk Management Of The Inventory Financing

Being along with the rapid development of Chinese economic,the autos,as the replacement of public transportation,become a signal of the improvement of the people’s living quality.Since China open up his market to the world,the Chinese auto industry has experienced a rocky growth within the last twenty years.More and more consumers and suppliers accept the financing products which are derived from supply chain finance.The consuming behaviour of the society are gradually changing from the traditional cash payment to the current credit payment,which opens a whole new market for the auto financing industry.Encourage by the policy,Chinese auto financing industry appeared since 2004,and it is developing rapidly right now.From the individual auto financing to the auto dealer financing,the economic profit of the financing service has become one of the biggest income sources in auto sales area.Nevertheless,as the Chinese auto financing industry is still in the primary status,the level of the auto credit consumption is lower than the one of the developed country.Besides,the auto financing companies could not keep itself from the huge financing risk,since there is not a completed law to constrain the bad behaviour from other companies.How to assure the safety of company’s asset,reduce the financing risk and develop the business at the same time? All the auto financing companies are devoted themselves to achieve their long-term strategy.This study finds the risk management problems or weaknesses of the whole dealer’s financing of the N auto financing company from the beginning to the end of the whole business process.The study combine the practice and theories to analysis the reasons which cause the problems and the weaknesses and propose the Optimized management resolutions to solve the problems or improve the weaknesses.First of all,the study analysis the business environment of the N auto financing company and the whole auto industry environment,which provide sufficient information source for the causes for the company’s risk management problems.Then,by using the practice and risk management knowledge find out the potential problems or weaknesses of the dealer financing process,which includes the problems of credit risk evaluation and policy,the problem of business operation and communication with auto manufacturer,the problems of qualification of the employees.After analysing the essential causes to the problems and the weaknesses,the study proposes the optimised management resolutions to the credit business,which contains adjusting strategy to the credit risk evaluation and policy,optimising the operation of the dealer financing business,specialising the employees’ background.Finally,the study suggests comprehensive measure to ensure that all optimised resolution is practicable.The target of the study is to improve the risk management environment of the N auto financing company.the study aim to contribute academic effort to the development of the dealer financing area by studying the practical study,finding out the potential problems,analysing the optimised resolution and proposing the assurance measures.