Credit decision-making of small, medium and micro enterprises based on entropy the paperight method and RAROC model

Abstract

In recent years, small, medium and micro enterprises have shown great development potential. Hothe paperver, due to a series of characteristics such as unstable operating conditions, banks need to improve the level of credit risk management for small, medium and micro enterprises. In this paper, through the entropy the paperight method and RAROC (return on venture capital), and based on the enterprise invoice information and credit rating data, the credit risk assessment method and credit decision-making scheme of micro, small and medium-sized enterprises are deeply discussed, and a series of reasonable conclusions are drawn. The paper establish an enterprise credit risk evaluation model based on entropy the paperight method, and according to this risk evaluation model, the paper get the bank credit strategy based on RAROC. In order to get a specific credit strategy, the paper refer to the actual policy of the bank, considering two aspects before and after the demand for loan from the enterprise: before the demand for loan, the bank works out the line of credit according to the annual profit of the enterprise, and takes this as the suggestion and limitation for the evaluation of the credit line of the enterprise.