Research On Credit Risk Management Of Microfinance Company A

Bangladesh microfinance model was introduced into China in1993. People’s Bank ofChina approved the pilot of microloan companies by the end of2005. The Pilot Guidanceof Microfinance Company, issued by People’s Bank of China and Banking RegulatoryCommission, encourages microfinance companies developing rapidly. More and moremicrofinance companies have launched microloan business.‘Microloan Company A’ is atypical company launching microloan business early in China domestic. Credit riskmanagement issues became serious increasingly with A’s development, threatening A’ssustainable development seriously. In this thesis, microfinance companies’ credit riskmanagement has considerably practical significance.Combining the microfinance operation characteristics, this thesis applies AnalyticHierarchy Process to the credit risk assess method. First of all, Microloan Company A’soperation status, organizational structure, business process and the existing problems ofcredit risk management are introduced briefly. Secondly, analyzed the causes ofmicrofinance company’s credit risk. We conducted credit risk assess of microloancompany in four aspects by comparisons between microfinance companies andcommercial bank. The affective assess method of credit risk with AHP introduced, whichwill transform the credit risk method from qualitative to quantitative and make it morescientifically.Based on the theoretical research above, closely combined with the specificcircumstances of Microloan Company A, launched a study on the credit risk managementsystem of company A. Firstly, do a complete investigation before loan. Secondly, applythe affective credit risk assess method with AHP introduced. Thirdly, set up risk warning process. Finally, put forward a complemented measure to strengthen the credit risk controlof Microloan Company A.