The Credit Risk Control Of Microcredit For Farmers In Large Banks

"Microcredit for farmers" is a program which provides small loans to rural poor people. It runs successfully in some developing countries, such as Bangladesh, Indonesia and Malaysia."Microcredit for farmers" includes a variety of different models, like personal credit, group credit, micro-enterprise credit, village bank credit and so on. The development of microcredit, on the one hand, is conducive to provide funds to farmers to help them carry out agricultural production activities, or other commercial activities, to lift themselves from poverty; on the other hand, is also conducive to help financial institutions develop the rural financial market.The service objects and service environment of microcredit in rural China are particular. The rural financial environment is poor, the rural households living dispersed, the line of credit is low, the form of a guarantee is weak, and these all cause the microcredit for farmers in a situation of "big risk, small gains". In rural China, most of the financial institutions that provide microcredit for farmers are small-scale anti-poverty credit agencies and rural credit cooperatives, because they have the geographic advantage. Large financial institutions such as the Agricultural Bank of China and other commercial banks do not have a significant advantage in the long-term development of microcredit for farmers, because of the lack of outlets and high cost of manpower and management.TaiCang has a relatively advanced economy and the agriculture in TaiCang is in a high degree of scale and industrialization. Those unique advantages all contribute to the development of financial market in TaiCang. TaiCang ABC has long been aimed at this market; however "how to avoid the high risk of rural microcredit and to gain profits with its brand and capital advantages" is the most important problem that they need to solve.To achieve the sustainable development of "Microcredit for farmers" program in ABC, docking the "big bank" and "small farmers" smoothly, the only way is to implement fine management. First, design the credit products rationally, making it match with the production and management needs of farmers, so that farmers can pay the debt on time. Second, carry out the credit grading system strictly, seriously screen the customers, ensuring that that the retained customers have the willing and ability to repay on time. In addition, extend the development mode and broaden the market. Then, through strengthening credit check and management, improving institutional construction and enhancing staff management to reduce credit risk. The last point is to improve the motivation and restraint system, to promote the culture of integrity compliance, to strengthen the credit sense of farmers and strictly punish the default events.