Title :
Financial contract model of credit guarantee based on default rate
Author :
Cui, Xiaoling ; Wang, Yunfeng
Author_Institution :
Sch. of Econ. & Manage., Liaoning Shihua Univ., Fushun, China
Abstract :
In order to make credit guarantee contract more scientific and subjective, it has built a credit guarantee financial contract model with default repayment factor considered. The analysis result has shown that credit guarantee institution may agree to guarantee or refuse to guarantee for SME when the retained earnings of SME is zero. There is a critical value of retained earnings for SME when the retained earnings is over zero. When it is over the critical value, the optimal strategy of credit guarantee institution may be to guarantee all application to obtain bank loan for SME according to the allocation proportion for credit guarantee risk with bank. When it is less than the critical value, credit guarantee institution is willing to guarantee part of application to obtain bank loan for SME, that is, credit guarantee may carry out credit guarantee rationing.
Keywords :
banking; credit transactions; optimisation; risk management; small-to-medium enterprises; SME; allocation proportion; bank loan; credit guarantee financial contract model; credit guarantee institution; credit guarantee rationing; credit guarantee risk; default rate; default repayment factor; earnings; optimal strategy; Contracts; Costs; Electronic mail; Fuel economy; Investments; Petrochemicals; Pricing; Reactive power; Uncertainty; Waste materials; Asymmetric Information; Credit Guarantee; Default Rate; Financial Contract Model;
Conference_Titel :
Control and Decision Conference (CCDC), 2010 Chinese
Conference_Location :
Xuzhou
Print_ISBN :
978-1-4244-5181-4
Electronic_ISBN :
978-1-4244-5182-1
DOI :
10.1109/CCDC.2010.5499043
