Study On The Risk Management Of Smallholder Loan For Agricultural Bank

After the China entered a new normal, with technology and ecological oriented modern agriculture urgently needed financial support. Injecting loan fund into rural areas can improve farmers’ living dilemma. Shrinking the gap between urban and rural area, has a certain positive influence. However, funding gap in rural finance for Agricultural Bank of China is an opportunity to develop peasant microfinance. The Agricultural Bank of China provided agricultural loans and proportion increased gradually. The imbalance between demand and supply is still increasing with the development. The question of the lack collateral security of peasant microfinance causes management risk of Agricultural Bank of China increased.Agricultural Bank of China as a oriflamme of national financial support for agriculture. In order to ensure the healthy and sustainable development, the peasant microfinance business must be taken to refined and comprehensive management.The Agricultural Bank of China in Suihua, as a case in this research. Firstly, the development status and risk management status of peasant microfinance of Agricultural Bank of China in Suihua were on-the-spot investigation. Next, The article select five years financial data during2011 to 2015 of the Agricultural Bank of China in Suihua. The research used CAMELS method to analyze the risk management capacity of peasant microfinance in Suihua branch. The conclusion is Agricultural Bank of China in Suihua fall short of risk management in the business of peasant microfinance. Although the risk of peasant microfinance could control currently, the upward trend of the risk is obvious. From the development strategy of Agricultural Bank of China in Suihua, the strength of peasant microfinance growth will still be a large amount of loan in future. The Suihua branch should take measures to resolve the upcoming crisis is quite important recently. This research shows that building varieties of cooperative mechanisms,paying more attention to the specification of business operation, establishing risk management mechanism and enhancing the effectiveness of project approval could be used to build a strong line of the bank risk management.