Analysis On The Reasons Of Enterprise Loan Default

Non-performing loans are one of the biggest headaches for commercial Banks not only they reduce profits,but also the long processes of clearing-up and disposing have tested risk management.It's a hot topic to study factors which affect loan default for companies.So it's with the author who works in Bank G.By the end of2017,the non-performing loan ratio of financial institutions primarily for banks had been 1.74% in China,0.4% below its year-earlier level.Non-performing loans were brought under effective control.With nationwide loan getting improved,the non-performing loan ratio of Bank G rose 0.45 percent to 1.89% since the beginning of the year.As we can see,quality of loans are significantly related to regional factors.Due to the differences of economic development levels,leading industries and the proportion of three industries across the country,the main factors affecting loan defaults are not same.So the author studies the default corporate of Bank G based on the economic development level of the city where the bank is located,and finds out the causes of the reasons by analyzing their specific conditions.It will bear practical significances on the followup for Bank G and give some reference value to other banks in their region.Firstly,describe the trend of domestic non-performing loans in recent years by collecting relevant data and finds out some representative research methods by consulting literatures on other loan defaults and bank risk management,then and determines its contents and research methods.Secondly,access to relevant information about corporate loan defaults from PBC(People's Bank of China)and CBRC(China Banking Regulatory Commission),research of historic data,analysis on the loan of large and medium-sized enterprises(MLEs)and small and micro enterprises(SMEs)make convenience for comparing the data of Bank G.Thirdly,on the local government's website do some research on the actual conditions of local economic development and future directions.These data may become the key factors in the government administration and have very important political and social impacts on the development of local companies,even determine whether the corporate makes loan defaults in the bank.Fourthly,analyze from the aspects offinance,operation,strategy and others based on 5 cases and get the main factors of Bank G's corporate loan defaults(policy,industry,operation and management,emergency and others)in the actual situation.Finally,ponit out 4 measures from risk management perspective,according to 5 case analysis and insights,the knowledge learned during the author's postgraduate career and summaries of years of credit experience.Move the gateway of risk prevention forward,help banks do a good job in pre-lending investigations and prevent "mouth".It'll reduce the probability of loan defaults.