Research On The Solutions To And Risks From “Three Rights” Collateral Loans In Chongqing Rural Areas

Rural Financial service is the weak part of the current financial service system. To solve the agriculture funds problem we have to start with the solution for the farmer’s financing problems. For such a long time, farmers are not permitted to borrow collateral loans with the rural land contract right, their houses and forest right.Chongqing became the first nationally to implement the rural financial service reforms focus on the “three rights” namely land contract right, rural house and forest right., and achieved great development.This paper discussed the status quo of the “three rights” collateral loan in Chongqing and its achievement. The “three rights” collateral loan helps to improve the fast growth of the agriculture related capital injection and helps to meet the financial needs of rural entrepreneur group hence further enhance the rural economic development. It also contributes to the income growth of the practice of the “three rights” collateral lending process, there exists a few problems such as stagnant collateral lending, unequal development of different collateral lending, the lack of enthusiasm of financial institutions and the farmers’ participation, the difficulty on move forward the lending procedure of the “three rights” loans, the difficulty on the valuation of the “three rights” loan and the high entrance standard of the credit approval of financial institutions.This paper also further discussed the risks existing in the rural “three rights” collateral lending. It made such conclusion that there are risks in the rights relations between regulations and the collaterals, in the valuation on the collateral process, in the assets handling after the collateral and in the compensation system.To avoid the risks, this paper analyzed on the reasons that have cause the risks by looking at the practical cases at work. It made such fundamental conclusion that main reasons causing the risks are those such as the lack of the laws and the supporting regulations, the lack of the risk compensation, transfer and sharing system, the immature market agency and the strong desire the interest party to avoid the risks and the risks of the agriculture industry itself.Based on the analysis on the “three rights” collateral risks reasons, the paper provided some suggestions on how to avoid the rural “three rights” collateral risks. They are mainly how to break free the rural assets out of the restriction of the law, how to improve the supporting system on rural “three rights” collateral financing system, how to further enhance the valuation system of rural assets valuation, explore the ways for the better collateral assets handling, and to improve the rural “three rights” collateral risk sharing system.