Research On Credit Risk Of Consumer Financial Asset Securitization In Home Credit

In recent years,with the growth of the national overall economic strength and the residents’ living standards,growing under the impact of the outbreak of the new champions league 2020,residents’ consumption concept is changing from passive to active,consumption as a carriage and of the economy,has gradually replace investment and exports in the current pulled the two horses as the primary factor of economic growth.Consumer finance condenses the power of both "consumption" and "finance",which is more in line with the domestic cycle that the country currently emphasizes:focusing on consumption.As the booster of consumer consumption and the test field of fintech,consumer finance can play its due role in promoting the development of real economy.At present,there are various participants in China’s consumer finance industry,mainly including commercial banks,consumer finance companies,auto finance companies and other licensed consumer finance institutions;E-commerce platforms,Internet companies,fintech companies and other non-licensed consumer organizations.In the past,consumer finance has been outdone by online small loans.With the introduction of Interim Measures for The Management of Online Small Loan Business(Draft for Solicitation of Opinions)in 2020,online small loans have been strictly regulated,and most small loan companies can only carry out business in their registered places,thus consumer finance has ushered in a good opportunity for development.In particular,it is an opportunity for companies with consumer finance licenses,because of the high threshold of application and strict review standards.However,one of the major requirements for the establishment of licensed consumer finance companies is that they are not allowed to absorb deposits from the public.Once this restriction is introduced,licensed consumer finance institutions will lack multiple sources of funds when expanding their scale,which is not conducive to the high-quality development of enterprises and even the whole industry.Therefore,many licensed consumer gold companies choose to issue asset-backed securities to solve the "bottleneck" problem of financing difficulties.In 2021,China’s consumer finance industry issued a total of 179 asset securitization products,and the total amount of issuance reached 2015.79 billion yuan,among which the total amount of products issued by licensed consumer gold companies accounted for 6.43%.But also should see different licensed antiseptic gold company in risk control and credit management ability difference,so the final issuance of asset-backed securities is faced with different credit risk,and domestic capital markets in recent years,especially the P2 P explosion ray,and cash loan problem increasingly prominent,these events are associated with the risk of credit,Therefore,in the current social context,it is of practical significance to carry out credit risk assessment activities for consumer financial asset-backed securities,and at the same time,to explore the influencing factors of credit risk,in order to promote the healthy development of consumer financial asset securitization.Home credit consumer finance companies in the licensed class consumer finance industry has an important position,it is one of four initial pilot consumer finance work,from with the opening after the time limit to meet the requirements of the issuance of asset-backed securities,in 2016 it released the first asset backed securities,as of now,$19 2021 asset securitization products,Ranked first in the number of licensed consumer gold companies issued,and no default record.Therefore,this paper studies the credit risk and the factors affecting the credit risk of the 19 asset securitization products issued by Home Credit Consumer Finance Co.,LTD.In this paper,the default distance DD is used to measure credit risk.Firstly,it introduces the overall situation of Consumer financial asset securitization of Home Credit,studies the transaction structure and relevant elements of product issuance,and analyzes the possible credit risks.Secondly,the modified KMV model is used to calculate the default distance DD of these 19 asset securitization products for quantitative processing.Finally,the factors affecting the credit risk of these 19 asset securitization products are analyzed,and multiple linear regression is conducted on these factors to judge the specific impact level.The article is mainly divided into five parts,the specific arrangement is as follows: The first part,from the perspective of "why",introduces the current consumer finance research background,the importance of choosing licensed consumer finance companies for research,to indicate a direction of the whole paper line;The second part sorts out and analyzes the research of domestic and foreign scholars,mainly including consumer finance and asset securitization,credit risk of consumer finance asset securitization,KMV model and credit risk;The third part analyzes the credit risk of Consumer financial asset securitization of Home Credit.From the perspective of the whole industry,from large to small analysis,it is concluded that credit risk mostly exists in borrowers,original stakeholders and other counterparties.The fourth part,empirical analysis,first illustrates the necessity of data selection,and then uses the revised KMV model to calculate home Credit consumer Finance company and the control group: The default distance DD of 38 asset-backed securities issued by the remaining 7 consumer finance companies was analyzed.The relevant elements of the original asset pool were analyzed,the factors affecting the default distance were hypothesized,and the influence relationship was verified by multiple linear regression.The results showed that: Both the asset securitization products issued by Home Credit Consumer Finance and the control group are significantly affected by the weighted average annual loan interest rate and weighted average loan term.When the loan interest rate in the original asset pool increases,the default distance DD will be reduced,resulting in an increase in credit risk.When the weighted average loan contract term increases,the default distance DD will increase and the resulting credit risk will be reduced.The fifth part summarizes the whole document and puts forward countermeasures and suggestions based on the conclusions: improve the original rights holders’ ability to operate products;Enhancing the financial literacy of borrowers;Strengthen supervision of other counterparties.