An Empirical Analysis of Loans Pricing of Commercial Banks for SMEs Bases on RAROC Model

DOI

10.2991/icemct-17.2017.275How to use a DOI?

Keywords

RAROC Model, SMEs, Commercial Banks, Loan Pricing

Abstract

Recently more and more commercial banks are willing to provide loans to SMEs under the guidance of the government, however, how to provide reasonable loan pricing for SMEs becomes an urgent and core problem faced by these banks. Loan pricing will be affected by many factors, and is also a more complex systemic issue for commercial banks. Based on the loan pricing model of RAROC model, this paper empirically analyzes the factors such as operating cost, economic capital and expected losses by using the panel data of thirteen listed SMEs of Zhejiang province. The results shows that the loan rates adjusted by the risk based on the RAROC model are higher than the actual loan rates, and the low loans pricing leads to be not enough conducive to the bank's compensation and risk aversion. The conclusion indicates that the risk-adjusted loans pricing can provide reasonable compensation on the risk and improve the efficiency of the loan in the end.

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  - Jiayu Kong
AU  - Jiming Li
AU  - Mengjue Ye
PY  - 2017/05
DA  - 2017/05
TI  - An Empirical Analysis of Loans Pricing of Commercial Banks for SMEs Bases on RAROC Model
BT  - Proceedings of the 2017 4th International Conference on Education, Management and Computing Technology (ICEMCT 2017)
PB  - Atlantis Press
SP  - 1273
EP  - 1277
SN  - 2352-5398
UR  - https://doi.org/10.2991/icemct-17.2017.275
DO  - 10.2991/icemct-17.2017.275
ID  - Kong2017/05
ER  -