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Title: |
The Bank’s Decision Mechanism on Inventory Financing in Competitive Credit Market |
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Source: |
International Conference on Engineering and Business Management 2012(Part 4 Urban Management and Financial Investment)
(pp 2905-2908)
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Author(s): |
Xuehui Yi, School of Management and Economics, UESTC, Chengdu, China, 611731
Zongfang Zhou, School of Management and Economics, UESTC, Chengdu, China, 611731 |
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Abstract: |
Based on the Core enterprises’ return guarantee against SME (Small and Medium Enterprises) about inventory financing, this paper establishes the optimal pricing models of the bank, the SME and the Core enterprise in competitive credit market respectively. Firstly, the article confirms the relations between loan rates and return- guarantee. Secondly, we establish the bank’s credit decision mechanism through the core enterprise and the SME optimal pricing decisions. The result show that if market equilibriums exist, all the optimal decisions, the bank’s, the core enterprise and the SME’s, must satisfy certain conditions.
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