Study On Smes’ Credit Risk Management Of C Commercial Bank

An increasingly important role is played by SMEs in our economy, so in order to broaden the market and seek more stable returns on the investments, commercial banks are bound to regard the SMEs’credit market as an importantly developing area. Bank is a special enterprise operating currency businesses, so it must be faced with various types of risks, particularly credit risk. Combined with unique characteristics of SMEs, the credit risk of SMEs is more difficult to control. There is no doubt that to enhance the credit risk management of SMEs will not only affect the banks’ business performance and competitiveness, but also be related to the security of bank assets. Therefore, by setting a local commercial bank as the object, the paper analyses the SME’s credit risk management issues, which will have an important practical significance.Firstly, the paper made a analysis on the theory of credit risk, including the theory of information economics, the credit rationing theory and game theory, therefore drawing a conclusion which is:there is a serious inherently information asymmetry between banks and enterprises, as a result, in the acceptance and management of SMEs’credit business, banks are facing two major problems, namely,"adverse selection" and "moral hazard". Based on the analysis of credit risk theory, this paper summarizes the sources of the credit risk of SMEs, namely high operating risk caused by its small scale, lack of free cash and other defects; the relatively weak capacity in facing the uncertainties brought by macro-environmental fluctuations; the lack of standard in credit process operation, including the imperfections of SME credit system, the deficiency of internal control system, the weakness of enforcement on loan management and the disorder of the competition between banks.Secondly, this paper analyzes the status of implementation and process risk point of the C Commercial Bank, pointed out several major problems that exist in the SMEs’credit risk management:the SMEs’credit risk management system is still not perfect, the SME risk assessment method is unscientific, the real-time risk warning system is missing and so on. These also cause a long process, low efficiency, high operational risk.In response to these issues, after the summarizing and learning from the foreign commercial banks such as Wells Fargo Bank, European Bank for Reconstruction and Development, Industrial and Commercial Bank of China in the SMEs’credit risk management philosophy and specific measures for SMEs’credit risk, the paper puts forward the following suggestions for improvement:adjust the SMEs’Loan organizational structure; optimize the lending policies, focus on and respond to the harm caused by the "contagion effect"; improve SME credit business processes.Nowadays, the study on the credit risk management of commercial bank is always for large enterprises. During the completion of this paper, the author penetrated deeply into the C Commercial Bank, through a study of its SMEs" credit risk management systems and processes, completed an SMEs’credit risk management of C Commercial Bank discourse which not only matches the uniqueness of SME business risk and also have some reference value and importance of practical significance. For the confidentiality of customer information and internal documents, through various efforts, the author was still unable to collect the complete data. Thus, quantitative analysis of credit risk assessment and risk warning mechanism in C Commercial Bank are unable to be conducted.