Rural Credit Cooperatives Credit Risk Control

Since1990s, with the in-depth reform of the market economy, financial system in rural China went through constantly improvements. To the end of August,2007, around the whole country, establishment of all the provincial institutes made rural credit unions more and more important. The reform focused on property rights and management rights which not only made breakthrough in commercialization and marketization, but also emphasized the importance of the provincial governments. After the reform, historical problems such as loan credit risk remain unsettled.Credit risk of China is a vital problem in the development of the whole rural financial system. Due to much not-performing loans, research on credit risk of rural credit unions is of necessary to guide the reform of rural financial system in China.This paper focuses on new ways to solve credit risks of rural credit unions and pays attention to the roles people could play in the system. After analyzing the theories of credit risks, the paper deals with the environment factors which restrict the rural credit unions. By in-depth observation of a specific bulls loan case, effective policy suggestions are made.