Study On Credit Risk Measurement Method For Finance Company In Y Group

The credit risk measurement method of Y Group Finance Company is the key-point in this research. Y Group Company is a large state-owned enterprise major in nonferrous metallurgy. Since Y Group Finance Company has established with the support of the group company, it has preliminarily established credit risk management system. But there are large gaps compared with commercial banks in terms of the credit risk management level, as Finance Company mainly serves for Group companies. Thus, there are few studies and literatures in credit risk management especially in the aspect of the credit risk measurement method. But in the credit risk management system of Y Group Finance Company, the most important is the credit risk measurement method. Only by applying suitable credit risk measurement methods can be beneficial for promoting the overall level of company credit risk management. This article firstly analyzes the current credit risk management system in Y Group Finance Company and gradually refines some existing problems in credit risk measurement. Then based on these problems, it combines characteristics of current credit risk measurement model to select the credit risk measurement method applicable for Y Group Finance Company.Firstly the dissertation applies documentary method to collect theories and literatures on credit risk management and credit risk measurement methods to analyze these theories and conceptual contents involved in this research, as well as covering the existing credit risk measurement modes.Secondly, make qualitative and quantitative analysis on the current credit risk management system in the company, and explain the credit risk management system currently used in Y Group Finance Company. On the basis of these, analyze the causes of these problems, and make specific analysis on the credit risk measurement method. Combining the industry characteristics of the Group Company and the present situation of Finance Company, make comparative analysis on modern credit risk measurement methods and propose suggestions on risk measurement methods.Then select KMV method and apply the method of combining theoretical research with instance analysis, with the help of applying EXCEL and MATLAB program, to figure out the probability of default.At last, through result analysis, work out that KMV method is the optimal choice for credit risks of Y Group Finance Company no matter in the availability or the applicability. It can also remedy the demands of requirements introduced by current credit risk measurement method in Y Group Finance Company so as to realize the promotion of the overall level and capability of the credit risk management in Y Group Finance Company.