The Credit Risk Measurement Of Domestic Factoring Business Based On Fuzzy Comprehensive Analysis Model

With the continuous development of market economy, updating information technology and increasingly fierce market competition lead market trade transactions to be more transparent which result in most of the vendors on credit transactions to gain market generating a lot of credit account and possession of a large number of enterprises liquidity. In order to solve the problem of reserving liquidity and cashing in credit account, the factoring business begins to developed. Factoring business in China began in1987, domestic factoring business blossomed in2002, rapid development in recent years brought much profit to the banks and other financial institutions, but also left lot of credit risk resulting in great losses.This makes the Banking delight to face huge profit opportunities with a cautious attitude to the various risks, moreover our primary concern is the credit risk. However, China has not, as the Western developed countries are in general, applied quantitative analysis commonly to domestic factoring business, but have adopted mostly expertise experience-based judgment, financial index analysis to measure credit risk of the factoring business. The definition and natures of the factoring business, show that domestic factoring business is a kind of contract between factors and financing companies, its substance is factor purchase accounts receivable or notes supplied by seller, and pay the debt after agreed period and provide a certain percentage of financing. Its final business object is the buyer’s receivables, the buyer in receivables maturity schedule to pay off creditors decides interests of gains and losses.Therefore, the key point of the factoring business credit risk is the buyer’s receivables, merely relying on the expertise experience, financial data analysis can not be accurately and effectively to avoid the risk of the receivables. Based on the current situation, we propose this question:how can predict, quantize, avoid and control risks of accounts receivable of the true business object before the signing the agreement projections? Starting from this issue and conbined previous research, analysis, exploration to find control methods for China’s domestic factoring business credit risk using fuzzy comprehensive analysis model and its expansion to measure receivables value at risk.On the basic of the existing documents and practices, as well as previous theoretically analysis of current problems of the factoring business, all these lay the foundation for research of this paper. From the above problem, through introduction and comparative analysis of credit risk assessment methods commonly used at this stage of international and domestic, combined with China’s national situation and domestic factoring business to analyze suitable measurement methods, fuzzy comprehensive analysis model and its expansion. Follow the principles and significance of construct indicators the paper obtains a credit rating index combined with Fuzzy comprehensive analysis model and its expansion, forward futures principle and discounted present value obtain the present value of the receivables to caculate factoring business credit risk value. For instance Taking listed SMES for instance, we conduct a detailed analysis to verify factoring business credit risk analysis model based on fuzzy comprehensive measure of the applicability of the research, and finally obtain related proposals. The paper follows the theory-the status quo-Problem-Design-Analysis-suggestion fracture. The main contents are as follows:First, we introduce the relevant research background to the urgency of the measure of the credit risk of the factoring business. Elaborating and combing the relevant literature, we summarize existing research status of the factoring business, learning that most scholars research the theme theoretically and empirically to find out the risk of accounts receivable of factoring business is the most important and controllable. According to related theory and analysis of the conclusions of literature, we conclude that the problem of this study is looking for a quantitative method to measure the credit risk of the domestic factoring business research.Secondly, based on the above issues, through comparative analysis commonly used at this stage of international and domestic credit risk assessment method, and the credit risk rating of the traditional model theory and modern mode of credit risk rating models, we elaborate on its meaning, advantages and disadvantages, the of comparative analysis combined with the essence of China’s basic national conditions and domestic factoring business to draw the applicability and its enablement of fuzzy comprehensive analysis model and its expand to conduct factoring business credit risk measurement model,then build the index based on the variables of the model needs. The paper builds effective assessment of factoring business of qualitative and quantitative comprehensive index system via the principles and significance of the indicator. Furthermore, combined with the practical experience, we empower the significance of the index with analytical approach to lay foundation to next instance.Then, taking listed construction company (SEMS) as research object, we obtain a quantitative indicator data through expertise experience grade method based on the company’s financial statements, company’s existing operating conditions, the development of the industry status quo with questionnaires. Using the previously constructed model framework, we study the situation of the company to obtain the difference between the present value of the receivables under the existing credit rating and the book value. That is the factoring (banks) to avoid the risk quantitative basis.Finally, based on factoring business credit risk value analysis, combined with other existing risk measures, better counter measures are benefit to the development of the factoring business.