Study On The Risk Identification And Response Of The Loan Mingde Micro-lending Company

Small loan companies, which are non-governmental capital organization form infinancial industry, have developed rapidly in recent years. However, since industries suchas real estate have been regulated and controlled by the government and the increase ofmacroeconomics has decelerated, the risk of small-loan industries is gatheringcontinuously with the risks of management, operation and policy increasing at differenceextent. Hence, it’s really an eager to analyze the risk of small loan corporations and be ableto identify and respond to their credit risks effectively. Increasing small loan corporations’sustainable development abilities and making full play of small loan industries’contribution to economy are equally urgent and significant.In this article, taking MD Small Loan Corp. as an example, research methods such asliterature search, site investigation and case study were implied to find how to build aneffective risk management system for small loan companies. There are seven chapters.Chapter one mainly introduced our research background, purposes and current situations.Chapter two contains the definition, theoretical basis and relevant systems of credit riskmanagement. Major problems and their essential causes about MD Corporation’s riskmanagement were discussed in Chapter three. In chapter Four, we analyzed MDCorporation’s framework design of credit risk management, including Top-Down design,guiding principles and supporting measures. Chapter Five focused on optimizing riskidentification and response of the whole credit process of MD Small Loan Corporation.Also, looking into credit risk identification from double perspectives and describing creditrisk in a three-dimension manner were raised in this part. FH Company’s case was studiedin Chapter Six. Chapter Seven are conclusions.The highlight of the thesis is that we have identified credit risk from both informationand payment sources. Post loan credit risk was described individually and overall.Meanwhile, four steps, establishing guiding principles of credit risk management, takingstronger control of credit risk sources, enhancing credit risk management supportingmeasures and improving the ability of credit risk management for special credit projects,were taken to decrease the credit risk gradually. The thesis provides a reference for othersmall loan companies on how to establish their own credit risk management system.