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China SME Credit Rating Analysis / 中国中小企业信用评级浅析


Author: Liu Hanbin
Date: January 13, 2014

China SME Credit Rating Analysis

In China today, SME’s have become an increasingly important part of the country’s economy. Small and medium sized enterprises have played an integral role in providing jobs, promoting technological innovation and developing international trade since China’s reforms that opened up its economy. According to the 2012 National Ministry of SME’s Department, there have been about 10 million SMEs, each SME with at least 8 employees, this number representing about 99% of the total number of enterprises in China, but their output only accounts for about 50% of the government’s tax revenue accounts, which means about 60% of GDP, thus leading to about 80% of job creation in 2012. As such, SME’s were a critical factor in providing a solid foundation to sustaining stable growth in the Chinese economy. However, since the financial crisis in 2008, problems with SMEs have been exposed, including: production factors costs increasing faster, heavy tax burdens, the difficulties in financing small enterprises, etc. Among these problems, the financing issue continues to be a major obstacle for SMEs. On the one hand, managing and operating SMEs do not require a high degree of sophistication and they often have poor financial auditing and a lack of collateral assets, but on the other hand, they often rely on a single financing channel – bank loans. Protection against risk has continued to be an issue that restricts the development of these enterprises. Unfortunately, banks refuse many companies because loan assessment procedures are cumbersome and time consuming even if the internationally accepted practice is to have the government guarantee these loans on the basis of companies meeting loan conditions. Therefore, to ensure the long-term development of SME’s, if credit ratings are used to assess SME’s they can avoid higher costs and help banks to reduce risk. At present, China uses a unified enterprise credit rating model, but most of the standards are meant for large enterprises and often times can not be applied to SME’s, making it difficult for these enterprises to participate in the rating system. Therefore, the establishment of a small to medium sized enterprise credit rating system would be a boon to the economy and avoid many of the issues the current credit rating system currently has.

In other countries, rating agencies are divided into two types, one kind is meant for capital market credit ratings, investment banks, securities companies, funds, insurance companies and other financial institutions. An example of a famous rating agency would be Moody’s, Standard & Poor’s and Fitch Ratings Company. The second kind of rating agency focuses on small to medium size enterprise credit assessment, the most famous example being Dun & Bradstreet. Their rating process involves: paying a fee to the ratings company, buying the report after the rating and announcing the report. Rating methods include qualitative analysis, but can be very subjective based on the credit analyst involved. China’s rating system began in the 1980s and was also broadly divided into two categories: one being more mature, such as the Dagong Global Credit Rating Co. Ltd., the other being more due to needs of the market, having belonged to commercial banks internal rating agencies. However, the rating agencies are lack formal training and realistically can’t be used to objectively rate SMEs. With China’s current development, domestic markets are in desperate need of a credit ratings agency that can properly and legitimately assess small to medium sized enterprises.

In order to establish this type of system, it is first important to consider what characteristics need to be considered in an SME credit. They are as follows: 1. A lack of financial integrity; according to disclosure of data by authorities, and 40% of SMEs intended to avoid their debt, which greater dampened the enthusiasm of financial institutions providing loans. 2. Financial Fraud. This includes companies who underwent tax evasion or provided false information on their financial audits. 3. Lack of commercial credit. The annual rate for contract compliance for SMEs was less than 70%, while those companies who defaulted owned more than USD$300 billion. 4. Low product quality. Because there is no strict accordance to a management system for production, some companies use inferior or even toxic raw materials for production. These factors all lead to a damaging of enterprise credit.

In response to the aforementioned characteristics of SMEs that need to be paid attention to when considering a credit system, a credit rating system for SME’s should include the following indicators: 1. Technological content of the product; 2. The quality of the company’s management; 3. Corporate solvency; 4. Cash flow ability; 5. Investment and innovation capacity; 6. Credit record. Specific methods of operation involve: First, determining the base value of the each item of credit rating and quantitative assessment according to the quantification of a weighted average from3 to 5 years. This result then needs to be compared to industry averages. Finally, the enterprises credit rating will be accorded based on the scoring formula. Thus, each industry can be used to compare similar companies within that industry.

In addition to the evaluation system above, countries should also establish a scoring system with specialized services for SMEs. During this period, it is important not to stunt the growth of other potential enterprises simply due to a few companies failing the credit ratings system. It is important to use a dynamic tracking method and regulatory rating as well as build a sample library that uses successful examples of excellent corporate performances as ideal cases to be applied to other companies. In the long run, with a stronger credit agency system to back these SMEs, leading to more reliable and trustworthy growth of SMEs, Chinese SMEs will continue to become one of the major engines driving China’s economy.

Writer: Liu Hanbin, Hopkins Nanjing Center Certificate ’13

作者:刘瀚斌
2014年01月13号

中国中小企业信用评级浅析

当今中国,中小企业已日益成为国民经济的重要组成部分。特别是改革开放以来,中小企业迅速崛起,在提供就业岗位、推动技术创新、发展国际贸易等方面发挥了重要作用。据2012年国家工信部中小企业司统计,已登记的8人以上的中小企业约1000万户,单位数量约占全国总企业数量的99%,但其贡献的税收约占整个税收的50%,国内生产总值的约60%,由此创造的大量城镇就业岗位约占总数的80%。可以说他们为国民经济持续稳定增长奠定了坚实基础。然而,自2008年金融危机以来,中小企业也暴露了一些突出问题,主要是:生产要素成本上升较快;税费负担过重;小微企业融资难等等。其中,融资问题一直是中国中小企业发展的主要障碍。一方面,中小企业本身经营管理水平不高,财务审计较差,可抵押资产缺乏;另一方面,他们可寻求到的融资渠道十分单一,目前主要依靠银行贷款。并且中小企业的风险担保问题一直是制约该类企业发展的瓶颈。国际上通行做法是由政府出面进行担保,按一定比例对符合贷款条件的企业进行担保,但事实上,由于担保贷款评估手续繁琐,费时费力,很多本来有良好发展前途的企业简单的被银行拒之门外。因此,提前对中小企业进行信用评级可以节省成本,协助银行降低风险,有助于该类企业的长远发展。当前,中国采取的是统一的企业信用评级模式,大部分标准是针对大型企业,很难适应于中小企业,很多企业也就不参加评级。因此建立一个适用于中小企业信用评级的体系,在当前具有十分重要的现实意义。
在国外,大致分为两类评级机构,一类是资本市场信用评级机构,对投行,证券公司,基金,保险等金融机构进行信用评级。其中著名的公司有穆迪,标准普尔和惠誉公司;另一类是针对中小企业资信进行评估,最著名的是美国的老牌公司——邓白氏。他们的评级流程简言之:向评级公司缴纳费用——购买评级后的报告书——发布公告。方法采用定性分析,信用分析人员个人的主观色彩很大。中国的评级制度始于20世纪80年代,大致也分为两类:一种是较为成熟的,例如像大公国际资信评估有限公司这类的机构;另一类是因市场需要而发展起来的,以前属于商业银行的内部评级机构。但是这些评级机构业务单一,缺乏科学训练,无法客观的对中小企业进行实事求是的评级。随着新时期的发展,国内目前急需一种针对中小企业科学评价的方法体系。
为了构建这种体系,必须要搞清中小企业信用存在哪些特点。这里具体列举如下:1. 融资缺乏诚信。据权威机构披露的数据显示,仅2012年逃债的中小企业用户占到总数的40%,这极大的挫伤了金融机构放贷融资的积极性。2.财务状况作假。企业为逃税漏税,在财务、审计上制造一些虚假信息。3.商业信用缺失。每年中小企业的合同履约率平均少于70%,相互拖欠的未付资金超过3000亿美元。4.产品质量较低。由于没有严格按质量管理体系进行生产,有些企业使用劣质甚至有毒原材料进行生产,这些都损坏了企业信用。
针对上述的特点,中小企业的信用评级指标体系,应该包括以下几项指标:1.产品科技含量;2.企业管理素质;3.企业偿债能力;4.资金周转能力;5.投入再创新的能力;6.信用记录。具体操作方法:首先确定定量考评的基值,按各项进行量化,计算3-5年内的加权平均值。然后,根据与整个行业的平均值进行相比。最后,将各项分值按比重最后代人计分公式,得到最后的企业信用评级。这样,各个行业内部既可以自我纵向对照,也可以横向与其他同类企业比较,取长补短,共同进步。
除了以上计分评估外,国家还应设立常设机构,专门服务中小企业。这期间,不能因为几个企业信用评级的失败,对其他有发展潜力的企业“一棒打死”。既要用动态跟踪的方法,监管评级;又要建立样本库,将那些已经在逐次评级中表现优秀的企业,作为典型案例进行培养。长此以往,中国中小企业的发展一定会进入良性循环,成为中国经济的巨大力量引擎。

作者:刘瀚斌 ,中美中心国证书班2013

Author: Liu Hanbin
Date: January 13, 2014

China SME Credit Rating Analysis

In China today, SME’s have become an increasingly important part of the country’s economy. Small and medium sized enterprises have played an integral role in providing jobs, promoting technological innovation and developing international trade since China’s reforms that opened up its economy. According to the 2012 National Ministry of SME’s Department, there have been about 10 million SMEs, each SME with at least 8 employees, this number representing about 99% of the total number of enterprises in China, but their output only accounts for about 50% of the government’s tax revenue accounts, which means about 60% of GDP, thus leading to about 80% of job creation in 2012. As such, SME’s were a critical factor in providing a solid foundation to sustaining stable growth in the Chinese economy. However, since the financial crisis in 2008, problems with SMEs have been exposed, including: production factors costs increasing faster, heavy tax burdens, the difficulties in financing small enterprises, etc. Among these problems, the financing issue continues to be a major obstacle for SMEs. On the one hand, managing and operating SMEs do not require a high degree of sophistication and they often have poor financial auditing and a lack of collateral assets, but on the other hand, they often rely on a single financing channel – bank loans. Protection against risk has continued to be an issue that restricts the development of these enterprises. Unfortunately, banks refuse many companies because loan assessment procedures are cumbersome and time consuming even if the internationally accepted practice is to have the government guarantee these loans on the basis of companies meeting loan conditions. Therefore, to ensure the long-term development of SME’s, if credit ratings are used to assess SME’s they can avoid higher costs and help banks to reduce risk. At present, China uses a unified enterprise credit rating model, but most of the standards are meant for large enterprises and often times can not be applied to SME’s, making it difficult for these enterprises to participate in the rating system. Therefore, the establishment of a small to medium sized enterprise credit rating system would be a boon to the economy and avoid many of the issues the current credit rating system currently has.

In other countries, rating agencies are divided into two types, one kind is meant for capital market credit ratings, investment banks, securities companies, funds, insurance companies and other financial institutions. An example of a famous rating agency would be Moody’s, Standard & Poor’s and Fitch Ratings Company. The second kind of rating agency focuses on small to medium size enterprise credit assessment, the most famous example being Dun & Bradstreet. Their rating process involves: paying a fee to the ratings company, buying the report after the rating and announcing the report. Rating methods include qualitative analysis, but can be very subjective based on the credit analyst involved. China’s rating system began in the 1980s and was also broadly divided into two categories: one being more mature, such as the Dagong Global Credit Rating Co. Ltd., the other being more due to needs of the market, having belonged to commercial banks internal rating agencies. However, the rating agencies are lack formal training and realistically can’t be used to objectively rate SMEs. With China’s current development, domestic markets are in desperate need of a credit ratings agency that can properly and legitimately assess small to medium sized enterprises.

In order to establish this type of system, it is first important to consider what characteristics need to be considered in an SME credit. They are as follows: 1. A lack of financial integrity; according to disclosure of data by authorities, and 40% of SMEs intended to avoid their debt, which greater dampened the enthusiasm of financial institutions providing loans. 2. Financial Fraud. This includes companies who underwent tax evasion or provided false information on their financial audits. 3. Lack of commercial credit. The annual rate for contract compliance for SMEs was less than 70%, while those companies who defaulted owned more than USD$300 billion. 4. Low product quality. Because there is no strict accordance to a management system for production, some companies use inferior or even toxic raw materials for production. These factors all lead to a damaging of enterprise credit.

In response to the aforementioned characteristics of SMEs that need to be paid attention to when considering a credit system, a credit rating system for SME’s should include the following indicators: 1. Technological content of the product; 2. The quality of the company’s management; 3. Corporate solvency; 4. Cash flow ability; 5. Investment and innovation capacity; 6. Credit record. Specific methods of operation involve: First, determining the base value of the each item of credit rating and quantitative assessment according to the quantification of a weighted average from3 to 5 years. This result then needs to be compared to industry averages. Finally, the enterprises credit rating will be accorded based on the scoring formula. Thus, each industry can be used to compare similar companies within that industry.

In addition to the evaluation system above, countries should also establish a scoring system with specialized services for SMEs. During this period, it is important not to stunt the growth of other potential enterprises simply due to a few companies failing the credit ratings system. It is important to use a dynamic tracking method and regulatory rating as well as build a sample library that uses successful examples of excellent corporate performances as ideal cases to be applied to other companies. In the long run, with a stronger credit agency system to back these SMEs, leading to more reliable and trustworthy growth of SMEs, Chinese SMEs will continue to become one of the major engines driving China’s economy.

Writer: Liu Hanbin, Hopkins Nanjing Center Certificate ’13


作者:刘瀚斌
2014年01月13号

中国中小企业信用评级浅析

当今中国,中小企业已日益成为国民经济的重要组成部分。特别是改革开放以来,中小企业迅速崛起,在提供就业岗位、推动技术创新、发展国际贸易等方面发挥了重要作用。据2012年国家工信部中小企业司统计,已登记的8人以上的中小企业约1000万户,单位数量约占全国总企业数量的99%,但其贡献的税收约占整个税收的50%,国内生产总值的约60%,由此创造的大量城镇就业岗位约占总数的80%。可以说他们为国民经济持续稳定增长奠定了坚实基础。然而,自2008年金融危机以来,中小企业也暴露了一些突出问题,主要是:生产要素成本上升较快;税费负担过重;小微企业融资难等等。其中,融资问题一直是中国中小企业发展的主要障碍。一方面,中小企业本身经营管理水平不高,财务审计较差,可抵押资产缺乏;另一方面,他们可寻求到的融资渠道十分单一,目前主要依靠银行贷款。并且中小企业的风险担保问题一直是制约该类企业发展的瓶颈。国际上通行做法是由政府出面进行担保,按一定比例对符合贷款条件的企业进行担保,但事实上,由于担保贷款评估手续繁琐,费时费力,很多本来有良好发展前途的企业简单的被银行拒之门外。因此,提前对中小企业进行信用评级可以节省成本,协助银行降低风险,有助于该类企业的长远发展。当前,中国采取的是统一的企业信用评级模式,大部分标准是针对大型企业,很难适应于中小企业,很多企业也就不参加评级。因此建立一个适用于中小企业信用评级的体系,在当前具有十分重要的现实意义。
在国外,大致分为两类评级机构,一类是资本市场信用评级机构,对投行,证券公司,基金,保险等金融机构进行信用评级。其中著名的公司有穆迪,标准普尔和惠誉公司;另一类是针对中小企业资信进行评估,最著名的是美国的老牌公司——邓白氏。他们的评级流程简言之:向评级公司缴纳费用——购买评级后的报告书——发布公告。方法采用定性分析,信用分析人员个人的主观色彩很大。中国的评级制度始于20世纪80年代,大致也分为两类:一种是较为成熟的,例如像大公国际资信评估有限公司这类的机构;另一类是因市场需要而发展起来的,以前属于商业银行的内部评级机构。但是这些评级机构业务单一,缺乏科学训练,无法客观的对中小企业进行实事求是的评级。随着新时期的发展,国内目前急需一种针对中小企业科学评价的方法体系。
为了构建这种体系,必须要搞清中小企业信用存在哪些特点。这里具体列举如下:1. 融资缺乏诚信。据权威机构披露的数据显示,仅2012年逃债的中小企业用户占到总数的40%,这极大的挫伤了金融机构放贷融资的积极性。2.财务状况作假。企业为逃税漏税,在财务、审计上制造一些虚假信息。3.商业信用缺失。每年中小企业的合同履约率平均少于70%,相互拖欠的未付资金超过3000亿美元。4.产品质量较低。由于没有严格按质量管理体系进行生产,有些企业使用劣质甚至有毒原材料进行生产,这些都损坏了企业信用。
针对上述的特点,中小企业的信用评级指标体系,应该包括以下几项指标:1.产品科技含量;2.企业管理素质;3.企业偿债能力;4.资金周转能力;5.投入再创新的能力;6.信用记录。具体操作方法:首先确定定量考评的基值,按各项进行量化,计算3-5年内的加权平均值。然后,根据与整个行业的平均值进行相比。最后,将各项分值按比重最后代人计分公式,得到最后的企业信用评级。这样,各个行业内部既可以自我纵向对照,也可以横向与其他同类企业比较,取长补短,共同进步。
除了以上计分评估外,国家还应设立常设机构,专门服务中小企业。这期间,不能因为几个企业信用评级的失败,对其他有发展潜力的企业“一棒打死”。既要用动态跟踪的方法,监管评级;又要建立样本库,将那些已经在逐次评级中表现优秀的企业,作为典型案例进行培养。长此以往,中国中小企业的发展一定会进入良性循环,成为中国经济的巨大力量引擎。

作者:刘瀚斌 ,中美中心国证书班2013

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