The Research On The Evaluation System Of Credit Risk In Small Loan Company

With the vigorous development of China's economy,small loan companies,a new type of credit,have emerged.They are also a powerful supplement of our financial system,especiallly in the shortage of funds of small and medium-sized enterprises and support of the "Agriculture,the Countryside and Farmers”,playing an important role.According to statistics,the number of small loan companies in China increase year by year.There were 8791 small loan companies and the balance of loans up to 942 billion RMB by of the end of 2014.Small loan companies were reaching to 8910 and the balance of loans as 9411.51 billion RMB up to 2015,in which there were extra 119 companies and the balance of loans had decreased by 8.49 billion RMB over the same period of last year.Therefore,the growth rate of small loan companies slowed down in2015.The reasons are as follows.On the one hand,the rise of online lending platform exacerbated the competition among the small loan companies.On the other hand,there are lack of effective credit risk evaluation system.Moreover,those problems,profit reduction,bad debts increased and other issues,had not been solved.It belongs to a high-risk industry for small loan companies.It's necessary to set up an effective credit risk assessment system to occupy a place in the fierce market competition.Therefore,the research on credit risk assessment of small loan company in China that can improve the credit risk management of small loan companies,and promote the sustainable development of the microfinance industry to provide financial support for our country has certain theoretical significance and practical value.This paper firstly summarizes the related theories and concepts of credit risk management,and analyzes the formation mechanism and particularity of credit risk for microfinance companies.With the soft information theory and relational lending theory,it exams the credit risk assessment system applicability to small loan companies in rural based on the experience of construction of credit risk evaluation system with analytic hierarchy process for small loan companies in the domestic and foreign,using Z company and Y company as an example.At last,I'm from two aspects,internal and external,to state the credit risk prevention measures for small loan companies,which may provide guidance for the small loan risk assessment at some level in china.