Study On Risk Management For Small & Medium Enterprise Credit Guarantee

The importance of Small & Medium Enterprise (SME) and the constraint on SME access to finance are receiving more and more attention. One effective solution to this problem is to set up specialized credit guarantee fund. In China, such credit guarantee funds are booming very quickly. Nevertheless, it is necessary to study and summarize international and Chinese experience and methodology of Credit Guarantee Risk Control to develop the sector in a sustainable way.Based on the studies the experience and lessons of foreign and Chinese credit guarantee fund operation and risk management, the author analyzes the credit guarantee risk management process, methodology and problems in Chengdu Small Enterprise Credit Guarantee Company and provides resolutions. The essay aims to create a risk management system, which includes risk identification, assessment and rating, appropriate to China environment. It will be established on the studies of the innovative "risk-sharing" model and 10- grade risk rating system adopted by the Chengdu CGC. The essay will also provide advises to the credit guarantee sector in China on how to decrease and diversify risk for its sustainable development, and finally contribute to the development of SME through credit guarantee fund's leverage effect.