In order to reduce the risks, banks has two ways to evaluate the loan exposure. One is credit rating, and the other one is pledge collaterals. Many literatures and financial regulations are emphasizing on the importance of credit rating. However, with the illustration of a plenty of empirical study, the pledging collaterals are the popular way which was using by “lazy” banks. Credit rating or pledging with collaterals is the gap between theories and practices. 

The aim of this thesis is to figure the factors which make the gap between the theories and practices. At last, the front-line employees are paid attention on. Since front-line employees are the first and direct one who contact customers. Reliability and responsiveness has a space to develop by training first-line employees, moral hazard controlling, and sectoral specialization the credit inspection.