In the process of resolving financing difficulties of small and medium enterprises (SMEs) in China, the measurement of credit risk of SMEs is a very challenging problem. In this paper we develop a novel model based on the original KMV model with tunable parameters to measure the credit risk of Chinese listed SMEs. By setting two credit warning lines to monitor the credit crisis of listed SMEs, we find that the predictive accuracy of adjusted KMV model is stable to the change of default points in Chinese listed SMEs, which is different from KMV ...