Since the small - micro business(or self - employed business) had not normally their financial statement, the credit evaluation for the business has neither concentrated on nor developed by formal model. For that reason, it had been placed on the dark corner of financial system.
This paper explains the necessity of the credit evaluation for small - micro business and develops it using Analytic Hierarchy Process (AHP). To begin with, the statistical analysis and the neural network analysis for credit forecast using the existing variables were performed. The result was unsatisfactory because the rate of forecasting accuracy for bankruptcy was low, compared with another credit evaluation model. More meaningful variables were needed and the different method for credit evaluation was requested.
In order to apply AHP to credit evaluation, I categorized the criteria and adjusted them with experts who were responsible for the trust guarantee. After fixing the evaluating factors, criteria and their hierarchy, the experts decided the weights of them through the designed questionnaires for each type of business. The results shows that the non-financial criteria are much more important than the financial criteria, especially the weights for manager's ability and experience are high. In addition, there is the difference of weights according to each type of business.
At last, I compared the developed model with the existing model or the main factors of Small Business Administration(SBA). As the business becomes smaller, the non - financial criteria or the judgement factors become more important. And we can see that the small - micro business has the both evaluation aspects of corporate and consumer.
