A Research About The Consumer Credit Risk For Commercial Banking

Consumer credit has become an important component in modern living.The consumer credit abroad started earlier in the 20th century,particularly the 1930s,has been developing more rapidly after World WarⅡ,when Western countries commodity was overproduction,lack of effective demand,demand of corporate for funds reduced,bank financing was also superfluous.The commercial banks in order to increase the profits,began to develop consumer credit.And the consumer credit has been making a considerable headway during the development of the credit market matures,the legal system related to the environment being perfected.In China,because of the level of economic development,the supply and demand of financial,marketing,legal constraints and other conditions,the real development of consumer credit began after the reformation and opening up.With the economic development,commodity production increased,the mid-1980s some cities in China began to transact personal housing mortgage loans.And the consumer credit began to develop,but slowly.In the late 1990s,the buyer's market with demand constraints gradually formed,the prices of commodity continued to reduce,and also a continuing downward trend in household consumption,insufficient domestic effective demand constraints become one of the restrictions of economic development.In 1995 the construction bank launched the first consumer credit business.And then consumer credit entered the period of rapid development.Especially in 1998 after the Asian financial crisis,to stimulate the consumer to increase the domestic demand,the government has accelerated the development of consumer credit,and it was explicitly proposed by the People's Bank that the consumption has become the new business growth for the banks.After reviewing the history of the development of the domestic and international,and the importance of consumer credit in modern life,we applied the Probit Model and the consumer credit data from Agricultural Bank of China to make a quantitative analysis for the commercial banks of credit risk of housing consumer credit and auto consumption credit.It is found that among the eight of the factors there are only the level of education and the variable of marriage has the same affection.The higher the level of education for customers of banks,credit funds will be given security guarantee;At the same time,if customer married when Mi=1,and variable of marriage had a positive impact on the risk which means more married people repayment schedule is not easy.The remaining variables are the opposite direction role for the two different funds.From the significant results,in auto consumption credit,the most important and most significant factor is the impact of education and age,which means that two factors should become the most important factors for the commercial banks to issue credit funds.As housing credit funds generally are long-term loans,in housing credit the banks need to inspect the customer's ability for long-term loan repayment,which means the banks should be focused on the variable of the ratio of repayment to the income per month.Above these,the author summarizes the conclusions.And accordance to the specific banking business and operating process the paper give some relevant policy recommendations.