3.1.3 Difficulty in Post-Loan Risk Control
According to the field research, the research bank
after the loan carries out risk control mainly through
the phone, door to door, contact with customer units
and other ways to collect, at the same time to
encourage the borrower through the monthly,
quarterly, semi-annual and other ways to settle the
interest rate, the use of risk clues to monitor the
system of regular decentralization of suspicious loans
(Xue, 2023). Numerous commercial banks, however,
have shortcomings in financial data monitoring,
making it difficult to capture and follow up on key
data information quickly. This limits the ability of
commercial banks to predict risks in a timely manner,
take stop-loss measures, or develop reasonable
response strategies. Although China's commercial
banks have set up a post-loan risk warning
mechanism, by technology, data and other factors
constraints, only based on loan overdue, deposit and
loan ratios and other direct indicators to set early
warning rules, early warning matters are not
comprehensive enough (Huang, 2023), or failed to
take the results of post-loan risk control.
3.2 The Main Credit Risks of MSMEs
Under the traditional credit risk management system,
MSMEs are mainly faced with the problems of low
information transparency, high financial management
risk and high market competition credit risk. These
problems affect the quality of assets affecting
financial institutions, the development of MSMEs
and the stability of the overall financial market.
3.2.1 Low Information Transparency
Low information transparency is a significant
disadvantage for MSMEs in the financial market.
Specifically, due to their small size and limited
resources, MSMEs often find it difficult to establish
a sound financial management system and
information system, leading to deficiencies or lags in
the collection, organization and disclosure of
financial information and operational data. This
information opacity firstly affects financial
institutions' credit assessment of MSMEs. In the pre-
credit review stage, financial institutions need to
judge the repayment ability and operational stability
of MSMEs on the basis of sufficient and accurate
information. Still, the opacity of information makes
this process complicated and uncertain. Financial
institutions may make conservative credit decisions
because they are unable to fully understand the real
situation of MSMEs, thus limiting the financing space
for MSMEs. In addition, at the post-loan supervision
stage, information opacity also poses a challenge to
financial institutions. It is difficult for financial
institutions to monitor the operation status and capital
flow of MSMEs in real time, and discover potential
risk factors in time and take effective measures to
prevent and control them. This information opacity
makes credit institutions have blind spots in pre-credit
review and post-credit supervision, thus increasing
the riskiness of credit investment (Zhang, 2024).
3.2.2 High Risk of Financial Management
Cash flow stability is the key to the survival of
MSMEs, and its impact is extremely significant.
Insufficient monitoring of cash flow by MSMEs may
lead to the risk of capital chain breakage (Zhang,
2024). When the enterprise faces cash flow problems,
its daily operations will be seriously constrained,
resulting in a tense or even broken capital chain,
which not only puts the enterprise itself in a difficult
situation, making it difficult to fulfill its payment
obligations to suppliers and employee payroll but also
triggers credit defaults due to the inability to repay
bank loans on time, which in turn affects the banking
system that provides it with credit support, resulting
in a decline in the asset quality of the bank, which
may ultimately cause This could lead to a decline in
the quality of bank assets and ultimately lead to asset
losses, affecting financial stability. The credit review
and accurate risk assessment can effectively control
costs and correctly recognize the feasibility of return
on earnings, which is the basis of credit risk
management (Zhang, 2024). Financial information is
the core of credit assessment. However, the
asymmetry of financial information makes risk
assessment more complicated, and it is difficult for
credit institutions to grasp the true and accurate
condition of the enterprise accurately, thus increasing
the risk of default. In addition to financial
management risks, MSMEs face unique challenges in
market competition, which also have an impact on
credit risk.
3.2.3 High Credit Risk of Market
Competition
MSMEs themselves are small in production scale and
not strong enough in production strength (Yu, 2023).
In the fierce market competition, MSMEs often have
limited resources, which causes it to be more difficult