Optimal credit strategy for MSMEs

North China Electric Power University, Baoding, Hebei Province, China

^* Corresponding author: 2628763305@qq.com

Abstract

We address two main issues: one is to quantify the credit risk of enterprises and establish a complete credit risk system, and the other is to give the optimal credit risk strategy for banks. We first analyze and pre-process the data. From the data, we extracted a series of indicators such as the total amount of input and output, and the length of operation. We analyze the credit risk in three directions: strength, stability of supply and demand, and creditworthiness, and establish a credit risk quantification system for the enterprise. Then we quantify the credit risk of the enterprise by entropy method and TOPSIS. Second, a function is fitted to the bank’s customer churn rate and the bank’s lending rate. Using a planning-type model, the credit decisions of the firms are required to be given. We follow the principle of maximizing benefits and minimizing risks to build a multi-objective planning model. We base on the scores of each firm that have been solved, for the classification of firms, and follow the principle of low credit risk, low lending rate, and set the corresponding lending rate for each type of firm. The model is solved by the through-order solution method, and the linear weighting method is used to test the comparison. The credit decision for each enterprise is given.