Credit Risk Evaluation of Micro-loan Companies on Soft Set

Characterized by operating regionally, “credit only, non deposit”, loans in small, scattered and short-term, micro-loan companies have became a major force of financial services in rural areas of China increasingly. Due to differences in the lending object and the basis of loan decision, credit risk evaluation of micro-loan and large amounts business loans are completely different, the current methods of credit risk evaluation can´t be applicable to micro-loan companies absolutely. Bases on a review of credit risk evaluation methods of micro-loan in foreign countries and in-depth analysis of special reasons that induce the credit risk to micro-loan companies, we found that the existing credit scoring model couldn´t evaluate the credit risk of loan applicants effectively and accurately in the operation of micro-loan companies. To address this problem, this paper proposes a suitable credit risk evaluation method on the soft set theory which deals with mixed uncertainty problem. We argue that integrate the operating characteristics with the credit risk evaluation method, loan officers can make loan decision more accurate on the soft information that collected at the present stage of micro-loan companies.