Quality Signals,SME Screening And Bank-Related Lending

The information asymmetry prevails in the credit market,and entrepreneurs are always more aware of the possibility of loan repayment than banks.Due to a weak information position,it is difficult for banks to reasonably price loans,and loan interest rates cannot reflect the risk level of borrowers.Although credit rationing is to some extent conducive to the prevention of credit risk by banks,when the adverse selection utility and negative incentive utility of interest rates and collateral are strong enough,banks fully use non-price term contract instruments such as interest rates and collateral It is not optimal to allocate credit.At this time,the use of information search to supplement and amend existing information is a positive reaction of banks to uncertainty.As a result,relationship lending based on the value information of the borrower’s quality has received more and more attention.Many empirical studies at home and abroad have shown that the long-term relationship between banks and enterprises can help improve the availability of credit for small businesses,lower their loan interest rates,reduce mortgage and guarantee requirements,and promote corporate innovation.This paper draws on the theoretical methods of information economics,sorts out the enterprise identification mechanisms(interest rate,collateral,and quality signals)used in the previous credit theory models,and explores their respective application scope and application conditions.This paper analyzes the phenomenon of credit rationing in the credit market from the perspective of enterprise identification,and gives a corresponding explanation for the financing difficulties of SMEs.Based on the previous analysis,the relationship intimacy variable is introduced.The mathematical model is used to characterize and analyze the relationship lending and borrowing,and discuss the interest rate,collateral,quality signal,and bank-enterprise relationship to the bank-enterprise credit balance under the improvement of information collection The specific impact of the choice of credit technology is expected to provide a reference for solving the financing problem of SMEs.The conclusion of this article mainly has the following two points.First,it proves that collateral is an information screening mechanism for banks to separate the risk types of loan projects.The number and types of collaterals will affect the pricing strategy of banks.Second,information search can partially alleviate but cannot completely eliminate the information asymmetry existing between banks and enterprises.Relational lending pricing banks will not abandon the use of collateral.