Research On Risk Management Of Rural Credit Cooperatives With The Example Of That In Hengyang

Rural credit cooperative has gone through ups and downs for more than60years, Since it has been established in the early nineteen fifties. After decades of development, it has become an active banking financial cooperation institution in the rural financial market, providing financial services for rural economic development, from the initial non-banking financial institutions. Because of its broad popular base and strong economic strength in the rural, it plays a positive role in consolidation of rural infrastructure and promoting rural economic development. However, rural credit cooperative’s function of main force for rural finance was limited by its operating status, especially by institutional and economic factors. And it faces serious challenges and problems for its own development such as huge non-performing asset, irregular internal structure and so on.This paper firstly studied on major risks of the rural credit cooperative theoretically combining with domestic and international researches on risk management. The major risks of rural credit cooperative are introduced as well as their characteristics in theoretically, which helps us to understand and recognize the risks. Secondly, taking the example of rural credit cooperative in Hengyang, we analyze the major problems involved in risk management of rural credit cooperatives, including the single financial service, the backward culture of risk management, historical burden and so on. Meanwhile, taking this as the basic point to expend our discussion on the risk management of rural credit cooperative from specific district to countrywide, with the analysis of major reasons that result in risks, including internal and external ones. Finally, I gave my personal advice on risk management of the rural credit cooperative based on theoretical studies, hoping it could help to improve the situation of risk management of the rural credit cooperative.