The Operational Risk Internal Control Research Of Microfinance In Y Rural Credit Cooperative

In recent years, the rural credit cooperatives to conduct microfinance business significantly reduce theneed for farmers to develop production of cash-strapped and in objectively promoting the agriculturaleconomy and rural development. As microcredit loans dispersed without collateral and credit characteristicsof asymmetric information, carry out small loans of rural credit cooperatives but gradually revealed directlyto enlarge the credit risk problem. These problems not only affect the sound operation of the rural creditcooperative, also governs the microcredit’s function in the development of agriculture and farmers.Credit quality is directly related to the operational effectiveness of the Bank’s assets, and developmentstrategies, therefore credit risk control has been the focus of banking. Micro-credit risks include credit risk,market risk and operational risk. Operational risk refers to risks experienced by enterprises during basicoperations. Specifically, it is the risk of losses due to inadequacy or failure of internal procedures, peopleand systems or external events. Operational risk is a kind of common, multiple risks, but hidden may leadto catastrophic losses may at any time.Therefore, strengthening the management of operational risk, creditrisk reduction loss credit operations for the rural credit cooperatives is more urgent, more necessary.Operational risk is a kind of endogenous risk, its occurrence is due to internal bank staff to ignore therisk control, illegal operations caused by.Internal control of commercial banks is to achieve the operationalobjectives, the implementation of a series of systems, procedures and methods by making and, the riskprevention and control, monitoring and correction after the dynamic process and mechanism.It canguarantee the effective enforcement of rules and regulations in the reasonable scope, so as to realize theoperation specification and compliance.Just so, the effective operation of internal control will help to improve the operational riskmanagement of bank.Microfinance operation risk for Y rural credit cooperatives, this paper subjects. First of all,an overviewof domestic and foreign scholars on research situation of operational risk and internal control, including inparticular connotation, characteristics, of Bank operational risk identification and assessment, as well as themeaning of the Bank’s internal control, goals and measures, and on this basis, summed up the relationship between internal control and operational risk. And then directed to microfinance, combined withmicro-credit business process detailed analysis of y-typical of rural credit cooperatives credit operationsviolation case against operational risk analysis revealed, and from internal control is made to complete theoperational risk management framework in order to effectively guard against credit losses from operationalrisk.