Research Of Small And Medium-Sized Enterprises Credit Risk Management Based On Logistic Model

The SMEs plays a vital role in China's economic and social development. SMEs are an important part of our national economy; they can promote rural economic development, increase local revenues, and improve social stability. However, the important role of SMEs and the financial difficulties they are facing are incompatible.The financing difficulties of SMEs are mainly due to the credit risk. Their credit risk exists for the following reasons:for the SMEs themselves, there are factors such as small scale, weak anti-risk ability, lacking of credit management system, less equity capital, poor production technology, etc. For the commercial banks, they always take a "credit rationing" credit method. This method can reduce the bad debt problems, but it makes the SMEs face greater financial difficulties. Besides, the lack of legal constraints and corporate credit guarantee mechanism, the slowly constructed social services and the credit guarantee system all make higher credit risks of SMEs than large enterprises.The reason why commercial banks lend less to SMEs is that they lack proper measure method when facing the credit risk of SMEs. At present, the relevant empirical analysis studies are largely focused on listed companies but very few on the SMEs. This paper will analyze the current credit risk assessment model used, and by discussing their advantages and disadvantages and applicability to the SMEs, finally find the appropriate risk assessment method which is suitable to our economy condition-Logistic model.Currently used credit risk assessment model are:expert evaluation, KMV model, Credit metrics models, Credit risk+model, but these models are not suitable for SME credit risk assessment in our state because of their shortcomings and limitations. As a non-linear probability model, Logistic regression model only need the previous data and financial statements of SMEs, and the method no longer depends on external credit rating agencies, so the imperfections credit rating agencies will not be the impact of measuring. Therefore, the Logistic model is a more suitable method for SME credit risk assessment in our state.This paper will develop reliable and effective evaluation financial indications using exploratory factors and confirmatory factors analysis,and ultimately make four categories of growth, profitability, operational capacity, solvency, and seven factors of Asset Growth Factor, Revenue Growth Factor, Operating Capacity Factor, Current Ratio Factor, Cash Ratio Factor, Main Business Efficiency Factor, Shareholders Benefit. Then we will get the specific expression of Logistic for SME credit risk through the empirical analysis, finally proved it a suitable method of SME credit risk assessment by testing.Finally, we make policy recommendations for SME credit risk management: for the SMEs themselves, they can expand enterprise scale and improve the corporate governance structure, establish customer credit investigation and evaluation mechanism, set up accounts receivable monitoring mechanism. For the commercial banks, they should change the business strategy, broadening the scope of banking and financial services, and foster a number of better qualified SME customers; for the institution-building, the first is to speed up the construction of social credit management system, and the second is to establish a complete legal system, Increase the penalties for dishonesty.