Bank Loan Allocation Model Based on Credit Risk Prediction of SMEs

Small and medium-sized enterprises (SMEs) are meeting financing difficulties because most commercial banks are worried about loan risks and capital loss. Existing research works provide some risk models and they do not integrate key factors such as enterprise strength and supply chain relationship. Integrating the factors, the paper proposes a comprehensive scheme of credit risk prediction and loan allocation. In the scheme, key indicator data are extracted from raw enterprise invoices. Then the probability of default (PD) is predicted based on logistic regression and Bernoulli distribution. According to PD and credit rating, loan interest decision model, including base and floating rate, is provided. Furthermore, the optimal problem of loan amount allocation under the constraints of loan scale and default loss is solved. The application case shows that the scheme is easy to implement. The scheme can satisfy the demands of banks to maximize profits and alleviate the financing difficulties of SMEs.