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credit rating will help banks to control risk of sme loans

recent media reports in china's coastal areas have a large number of small and medium enterprises funding strand breaks, business owners complain that lead to business failure. in my opinion, certainly has the lock of bank money, credit volume decreases and other factors, but they are not blamed for causing collapse of smes directly along the coast. of these failures over has nothing to do with the main business of long-term investments such as real estate, is leaving its the important predisposing factor. this phenomenon also increased the bank's bad loan ratio in a disguised form.  

according to data released by the china banking regulatory commission recently showed first quarter of 2011, the commercial banks ' bad loans amounted to 433.3 billion yuan, down 300 million yuan from the end of last year; bad loan rate of 1.1%, level with the level at the end of last year. according to the estimation of risk management of bank of china headquarters, maintain steady and fast economic growth (gdp growth 7%), moderate liquidity (m2 growth 16%) case, the bank's bad loan ratio of the next five years a reasonable interval for 1.61%-3.24% would be appropriate.  

tianjin financial university credit management college deputy dean sun sen think, "now regardless of transparency of level, local government financing platform raised to of funds scale, has beyond it itself can bear of repayment capacity has, so central timely to put voted to this field of funds le live, is very right of, from long-term view, transparency certainly is more high more good, here just local government, also should including central government, such to reflected out on taxpayers, and investors responsible of attitude this is credit management ' information asymmetries ' important principle is one that requires a long time to solve the problem. " 

" and control of bad loans need a bank loan of credit risk monitoring and management capabilities, in this regard, the current from the cbrc to the banks is very important. "sun sen added.  

and at the same time, after following the fitch, moody's, the international credit rating agency p last week released the china banking credit rating report, noting that tighter monetary policy measures and other initiatives aimed at controlling credit risks could significantly weaken the chinese banking's profit margins in coming years. for the banks, how to effectively reduce loan costs, is the perennial problems and restricted bank profit growth.  

for provisioning coverage ratio falling bank should reflect on what is causing this situation. banking industry spans, attributes a wide variety of small and medium enterprises, if the retail model to complete the loan, heavy volume of business does not say quality is difficult to control. the sme life cycle short, characteristic of business changes fast, different contrast to the large enterprise. and to real-time understanding of small business trends, it is not easy. why not consider the introduction of third party rating agencies helped banks loan screening companies?  

have begun to have noted this problem, such as small and medium enterprises association and professional third-party advisory body to develop a credit rating. for small-medium enterprise's credit rating can help banks preliminary screening of reputable enterprises, reduce banks bad loans ratioses; but also in the context of monetary tightening to help smes really need capital to do something in finding sources of funding for its timely help.