Study On The Risk And Management Of Farmer's Loan

Rural finance is the most weak link in the financial market,but also the most flexible link.The former is because it is on the edge of the formal financial institutions,and the later is because there are extremely diverse folk capital forms in rural finance.Now,many problems in rural financecould be seen from the level of formal financial institutions.For example,there are less financial institutions,networks and effective collaterals.The colorful side can be seen from the increase of non-official finance.Whether folk lending(usury,mutual loan)and social gatherings(Rotating Savings and Credit Association,Rosea,Yao Association,Tai Association),or trust and investment companies,equity investment institutions and private bank,which operated as formal financial institution,can develop well.From the mainstream point of view,compared with other financial markets,rural financial market has not only the congenital deficiencies,but also development lagging.The main obstacles of its development are imperfect rural credit system 5 lacking of effective collateral,lagging financial service system construction,difficulty of farmers,loan.According to the point of view,many beneficial exploration researches have been carried out in academia,focusing on reasons for difficulty of farmers1 loan,risk and measure of farmers' loan,factors and management of farmers' loan risk.On the research method,There are two mainly,one is factors and evaluation of farmers' loan risk based on measurement model,and another is farmers' eredit rating and establishment of credit mechanism based on credit rating theory.Both of them emphasize the deficiencies of farmers' credit,and design the corresponding research framework for it.On the research conclusion,Four main points of view are formed.The first one is credit products'elasticity of supply is insufficient.The second is farmersr loan is difficult because lacking of effective collateral.The third is farmers' loan influenced by natural conditions,economic income,types of loan and geographical location has high risk.And the last one is effective control in risk of farmers' loan must be carried out.But now,credit rating and risk discretion for farmers are usually through credit appraise system of traditional finance or general financial risk management nethods.They analyze and measure risk of farmers' loan without combining with Chinese farmers' characteristics,so a few worth discussing questions are derived.Whether risk of farmers' loan is so high as determined by the mainstream view?How to identify,evaluate and measure the risk of farmers' loan objectively?If a new and effective measurement system can be set up?If the risk of fanners' loan can be subdivided further combining with the characteristics of farmers and farmers' loans?A series of problems remain to be further researched and more objective and effective research conclusions should be reached combining with the actual situation.Above on that,based on the basic national conditions in the primary stage of socialism of China and socialism market economic theory,this paper discusses formation mechanism,identification,measurement and control of the risk of farmers,loan from the view of financial organization in banking industry with the comprehensive application of economics,finance,statistics and econometrics.The:main research contents and conclusions are as follows:(l)Through literature search,this paper reviews the research production on the type and characteristic of farmers'loan,eause and factors of the risk of farmers'loan,evaluation,measurement and management of the risk of farmers9 loan,which can be used for reference.For this,theoretical basis and analytical framework are designed.(2)Through qualitative analysis and Logical analysis,this paper discusses the formation mechanism of the risk of farmers' loan including farmers'unsecured loan,loan on guarantee,mortgage loan and hypothecated loan.Then this paper analyzes factors and discerning methods of risk formation of farmers' loan.(3)Through contingency tables and multiple regression model,this paper analyzes main factors of farmers' loan amount according to sample figures from sample survey of rural credit cooperative in 9 cities in Fujian.Studies show that education of borrower and types of loans have a significant impact on the loan amount;direction of loan investment,age of the borrower,whether owning real estate and credit rating have a significant impact on the amount of farmer's loan on guarantee;direction of loan investment,monthly interest rate,education of borrower,whether owned real estate have a significant impact on the amount of farmer's mortgage loan.(4)This paper uses logistic model and analyzes the factors that affect risk of farmers'loan according to the farmers loan data of Rural Credit Cooperatives of Ninghua County,Sanming City in Fujian Province.Research shows that the loan amount,loan distribution,loan type have a significant impact on farmers,non-performing loans;monthly interest rate,loan amount have a significant impact on farmer's non-performing loan of loan on guarantee and mortgage loan;monthly interest rate,loan amount,loan distribution has a significant impact on farmers,non-performing loans of unsecured loan.The comparison shows that factors of non-performing loan of three kinds of farmers9 loan are monthly interest rate and loan amount.The difference is that loan distribution has significant impact on non-performing loan.(5)Depending on the kermel density estimation method and using the non-parametric program,according to the legal loan classification data from 67 farmers of rural credit cooperatives in villages of Fujian Province in 2012.The distribution of risk of farmers under different lending model is analyzed,and the grading risk levels,and then uses software which is Mathematica9.0 to calculate different types of loans to farmers NPL ratio is in the range of probability of each risk.Studies have shown that:Farmers risk within the loan guarantee fanners a mortgage risk range that is performing loan ratio less than 3%of the maximum likelihood of occurrence;and farmer credit risk distribution is more dispersed,there is the risk of the occurrence of risk appeared in every region;The risk of collateral loans is very low.The result of analysts believes that the risk of loans to farmers in a risk-prone area,and the non-performing loan ratio is less than 3%that is small farmer risk loans.Loans to farmers in Fujian Rural Business and Credit Cooperative in 2012 NPL ratio was 1.3%,higher than the provincial agriculture credit cooperatives non-performing loans,and 0.11 percentage points lower actual situation.It is consistent,which is considered a high-risk loan to farmers mainstream view and is not the same.Through a comparative analysis of 2012 rural credit cooperatives in nine districts and cities in Fujian Province farmer loan classification data,the existence of differences between different types of household credit risk.The maximum credit risk farmers ensure credit risk that following by farmers'mortgage risk which 1s very small,due to the relatively small farmers'secured loans business.The risk is minimal.Risks of different kinds of namely loans to farmers in the province,s non-performing loan ratio of nine municipalities and districts are not the same,the impact of different types of loans to farmers' risk factor is not a single region and is not static,but it is comprehensive.Per farnners'capita loan size has the maximum impact.The impact of per capita income of farmers,agriculture,forestry and water affairs has proportion of total expenditure on non-performing loans and other variable rate loans to farmers of the obvious.(6)Using the summary induction had the conclusion.Where digging out the implicit policy implications,the study of existing problems and future research priorities were confessed.Firstly,the paper focuses on the causes of the risks arising loans to farners,risk identification and measurement,risk distribution.The Showing is that:?Credit risk is different from other subjects,easier to other systemic factors that interfere with natural risks,rooted in the identity of the farmers,occupational and property characteristics.?Loans to farmers affected by the risk of major types of loans,loan amount and factors lending rates.Loans to invest namely use of the loans and other effects·?Regional distribution of loans toward farmers and different kinds of risks have in common household credit risk profile.And the policy implications were digging combed,studies suggest that RCCs from perfect risk management system and innovative mortgage system,strengthening internal management to effectively identify and manage credit risk farmers,thereby reducing the risk of loans to farmers to further increase agriculture credit cooperatives and other financial institutions on loans to farmers enthusiasm,and promote the healthy development of rural credit cooperatives and "farming" sustainable development.The inadequacy of the study is that the sample may not be representative,to some extent,affected the research results.It failure to combine the regional economic structure and characteristics of specific mechanism,does not analyst distribution and risk of loans to farmers.In the future,we will expand the scope of the study including credit risk identification mechanism for farmers,measure,regional risk and risk distribution depth study.