Research on the best loan-to-value ratio of inventory financing based on credit risk

DOI

10.2991/febm-17.2017.138How to use a DOI?

Keywords

credit risk; inventory financing; lending decisions.

Abstract

The loan-to-value ratio is the key to decide bank facing different degree of credit risk, which directly affect the profitability of the bank. In order to avoid bank's losses accused by inventory financing due to credit risk, this paper chooses the loan-to-value ratio as the research object supposed that Credit risk events follow Poisson distribution. By the model construction, the bank can get best ratio under different credit risk. The research results provide important practical significance for bank to make decisions about the best loan-to-value ratio in the inventory financing business of the loan enterprises.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yili Su
AU  - Fuchang Li
AU  - Guichang Zhe
AU  - Xiaohui Hu
PY  - 2017/10
DA  - 2017/10
TI  - Research on the best loan-to-value ratio of inventory financing based on credit risk
BT  - Proceedings of the Second International Conference On Economic and Business Management (FEBM 2017)
PB  - Atlantis Press
SP  - 1036
EP  - 1040
SN  - 2352-5428
UR  - https://doi.org/10.2991/febm-17.2017.138
DO  - 10.2991/febm-17.2017.138
ID  - Su2017/10
ER  -