A Study On Risk Management Of Credit Service For Small And Micro Businesses At The Credit Center For Small-sized Enterprises, Bank Of Ningxia

The Small and Micro Business (SMB) has been recognized as a critical component of national economy development. Adding to that, commercial banks are quite aware of the potential values derived from the customer base comprised of SMBs. Driven by external competition, as well as internal profitability, commercial banks regard SMB to be a focus of service development, and seek to promote a spiral of businesses and services in this domain. However, the credit risk of SMBs has been deemed as a prominent issue in service processing and credit administration. This issue is associated with several possible factors including the special pattern of how SMBs operate their businesses, the nature of SMB credit operations (i.e., short-term, small size, high frequency, and urgency), the deficiency of commercial banks in processing credit services, and the inconsistent values in credit administration. Credit risk is thought to be more serious even in these years under the national economy conditions. Beset by the increasing ratio of non-performing load, a large number of commercial banks confront great obstacles in credit services expansion. Situational hassles occurred at this period call for commercial banks to employ scientific and efficient managerial tactics as a way to cope with the issues mentioned above. It is hence highly necessary and meaningful in conducting studies on risk management of SMB credit services in commercial banks, which is believed to be beneficial to the goal of business operations and development.The Center of Small Business Credit of Ningxia Bank, abbreviated as the Center, is the specialized agency aiming at providing professional credit services for small and micro businesses, and individual merchants. Suffered from deficiency of management and downside of economy, the Center is obsessed by a dual-increase tendency of non-performing loan, a crucible of risk management in providing credit services for SMBs. Through reviewing on relevant theories in risk management, taking credit service practices taken by the Center of Small Business Credit at Ningxia Bank, and conducting in-depth qualitative analysis on the practice models and existing issues, the current study proposed tactical and technological initiatives as coping approaches in risk management of SMB credit services. Generally, the purpose of this study was to make recommendations on coping with risk management issues occurred in the sphere of SMB credit services in order to effectively decrease the ratio of non-performing loan and promoting sustainability of credit services.