A Risk Management Study On Micro-Finance For Rural Credit Cooperatives Of Rudong County

As the main force of rural finance, Rural Credit Cooperatives, which consider serving the" Farmers, Rural Areas, Agriculture Production "as their basic tenet, make a great contribution to enhancing the income of farmers, increasing agricultural production and developing agriculture. As a kind of financial products which serve the villagers, Rural Credit Cooperatives provides a good opportunity for villagers with low income and small and medium-sized enterprises. It plays a significant role in Rural Credit Cooperatives’ pursuing economical benefits and carrying out their social obligations. The quality and the risk of credit loans can directly influence the existence and the sustainable development of Rural Credit Cooperatives. Comparing to municipal commercial banks, the Rural Credit Cooperatives, which are the main strength in rural economy, it does not has the advantage of capital scale owing to historical reasons and its own characteristics. Since the beginning of micro-credit business, Chinese rural financial institutions are absent in keeping away from credit risk throughout several years’practice of exploration. In the development of micro-credit loan, Chinese rural institutions expose lots of problems and can not completely copy the method of foreign counterpart for they have different national conditions. With the development of micro-credits in foreign world over the years.they have explored a great many relative theories, building a large number of models and owned a lot of practical experiences, but we cannot only copy their methods because of difference between us and our counterparts. Chinese rural institutions need to consider it as for the reference, based on which Chinese Rural Credit Cooperatives should be active in innovation and audaciously explore effective means conforming to the situation in our country.In Chinese country, villagers’demands of credit loans, including the demands of small loans which come from life necessities, have been suppressed ever since a long time ago. Capital shortage has been obstacle for villagers in the way of improving the life quality of the population and developing rural economy.Beginning with the relevant theory about rural micro-finance in china, this paper is trying to analyze the features of micro-credit business, assort micro-finance and give a summary of development history of micro-finance in China. Based on the depict of the features of micro-finance, this paper is set in Rudong County rural credit unions of Jiangsu in China.Started with the overview of development situation, it makes a concrete analysis of existing problems of micro-finance and risks engendered. In addition, this paper summarizes the main reasons of risks engendered and comes up with relevant countermeasure of controlling the risks.