The credit analysis of transportation capacity supply chain finance based on core enterprise credit radiation

Article type: Research Article

Authors: Xu, Lili | Liu, Feng^{; *} | Chu, Xuejian

Affiliations: School of Management, Shanghai University, Modern Logistics Research Center, Shanghai, China

Correspondence: [*] Corresponding author. Liu Feng, Tel.: +15801956681; E-mail: [email protected].

Abstract: This study examines the application of the business model of supply chain finance depending on the core enterprise, to the credit financing of transportation capacity enterprises. It studies the credit transmission characteristics regarding core enterprise credit radiation, presents the core enterprise credit segmentation and credit pricing, and transforms them into the calculation of credit guarantee and the default probability of core enterprises. Credit guarantee is regarded as a constraint of financial institutions’ credit decisions. Using probability density and logistic tools, we construct a profit maximization model for financial institutions and solve their optimal credit decision for a specific interest rate. Through numerical experiments, we verify the validity of the model and conclude that increasing the business volume between financing enterprises and core enterprises or reducing the probability of default can effectively improve financial institutions’ credit line.

Keywords: Credit segmentation, credit pricing, default probability, transportation capacity financing, credit decision

DOI: 10.3233/JIFS-201818

Journal: Journal of Intelligent & Fuzzy Systems, vol. 40, no. 6, pp. 10811-10824, 2021