Research On The Credit Risk Of Small Loan Companies

Small loan companies as an important innovation of financial institutions,broaden the financing channels of small micro-enterprise and relieves the financingdifficulties of small and medium-sized enterprises. However, under the constraints ofexisting policies, market positioning, their own imperfections and other factors, smallloan companies inevitably face high credit risk in the course of business, so theanalysis and study of their credit risk are of great importance both in the theory andpractice.This paper adopts the method of case analysis and selects H small loan companyas the case of studies. Firstly, this paper briefly introduced the development of smallloan companies as well as the main forms credit risk of H small loan company, layingthe foundation for the analysis of the causes below. Secondly, this paper analyzes thecauses of credit risk of H small loan company and considers the main formationreasons of their credit risk are: the loan structure is irrational, the internal risk controlsystem is imperfect, the lack of supervision systems, in addition to particularity ofborrowers, low quality of staff, the impact of external environment and other reasons,etc. According to the above analyses of the formation reasons of credit risk, H smallloan company adopts the following management measures: optimizing the creditstructure, establishing the credit risk early warning system, simplification of the loanprocess and the gradual establishment of customer credit file systems. Finally, thispaper puts forward four aspects recommendations of credit risk control, such asoptimize the credit structure, improve their risk management level, improve theexternal environment and intensify policy support.