Game Research And Case Study On The Credit Risk Of SMEs Supply Chain Finance

In recent years, SMEs have been playing an important role in economic development inChina. However, the problem of SMEs financing has not been solved yet. Lives of SMEs inChina are shorter than developed countries’. The problem of financing is the main troublesomefactor of SMEs’development. Supply chain finance, as a new direction of finance, has providea new road for SMEs financing. This new means of financing brings convenience to the bankand enterprise. However, it also brings new risks, the most important of which is credit risk.Thorough analysis and prevention of the credit risk is beneficial for the development of supplychain finance.This thesis uses the methods of theoretical research, game analysis and case study. Thecurrent situtation of the research of supply chain finance is summarised through literature andtheories review. On this basis, the value and risks of the supply chain finance are analyzed.Game analysis builds game models between banks, enterprises and SMEs. There aresuggestions to promote development of the supply chain finance after case studies.Through research, this thesis gives the following conclusions. Firstly, supply chainfinance provides convenience for financing of SMEs, but at the same time it brings morecomplex risks to the participants. Besides credit risk, legal risk and operational risk, there aresome other external risks. Secondly, due to asymmetry information, the participants of thesupply chain finance game with each other. To reduce the probability of default, penaltiesshould be increased. And the banks need to minimize the cost of supervision and establish agood relationship with the enterprise. Banks try to get more information of enterprises toreduce asymmetric information. The core enterprises need to enhance the management of the upstream and downstream enterprises in the supply chain to help the banks carry out thesupervision work. Thirdly, the development of the supply chain finance can not be separatedfrom government departments’ support. Good environment is beneficial to the development ofsupply chain finance.