Study On The Small And Medium-sized Enterprises Credit Risk Management Strategies Of Agricultural Bank Of China, Nanchang Branch

In recent years, with the continuous development of the socialist market economy, our country’s small and medium-sized enterprises have developed rapidly, they already become the most active force of the national economic growth, as well as a crucial role in promoting social development.Whether in the developed countries or in the less developed countries, SMEs are holding an increasingly significant position in promoting the national economic development, and in creating enormous wealth for the community.They are also the basis for a stable society, SMEs have become the basic force in providing jobs.However, the environment makes it very difficult for the SMEs to grow, especially the financing problem, which is the most daunting challenges for the SMEs.Especially commercial banks tend to profit in the first place, in the face of the loan applications, it is always because of some systemic risks inherent in the small and medium-sized enterprises so that banks give up providing funds to them, it refrains the healthy development of SMEs, resulting in a vicious cycle, which is unfavorable to the entire development of social economy. So we need to explore to solve the SMEs credit risk management issues of commercial bank in order to enable SMEs to better serve the community, as well as to better grow and develop.Since the inception of Agricultural Bank of China,Nanchang Branch, it is responsible for financial services in Nanchang County of Jiangxi Province, and quickly open the market, expand their business, develop a suitable business development model for Nanchang county. Besides, Nanchang Branch has established their own branch of philosophy, and build up a long-term healthy and stable cooperation relation with many kinds of enterprises in the country. On the basis of an overview of SMEs credit risk characteristics and the types in Agricultural Bank of China, Nanchang Branch, then the papers analyzes the current position and existing problems of SMEs credit risk management, and puts forward some corresponding strategies to optimize the operation in the business, the strategies are namely from following aspects, that is the structure of organization, institutional innovation, process management, personnel training and culture cultivating. This paper also reveals that, in line with the larger enterprises in the same industry, SMEs make loans more frequently, a small amount of short-term financing needs within SMEs are more acute, and many SMEs have a requirements for short-term loansto meet their short-term liquidity needs, almost every firms remain unsecured support, insufficient collateral. Additionally, no plenty of staff and the quality is not high, the internal control is not perfect, not enough financial awareness, limited management level, no plan for the use of long-term funds. All of above leads to greater credit risk in the SMEs.Therefore, SMEs need to improve its financial reporting system to perfect the whole quality, as well as enhance the management level and ability to get a good credit from Agricultural Bank of China, Nanchang branch and other commercial banks. By doing these can SMEs effectively solve the difficult problem of SMEs financing. From the perspective of Nanchang Branch, when consider loans to certain small and medium-sized enterprise, the bank should pay particular attention to the industry the firm in and be careful to choose the industry that is less susceptible to fluctuations in the economic cycle. Also, the bank should aware that the funds cannot be over-concentration in lending in the same industry or a few industries. Although Nanchang Branchis vigorously promoting the "retail, corporate, county" three business transformation, strengthening internal management, sliding business foundation, the operating efficiency, core competitiveness and service levels have achieved remarkable results. But there are also many problems existing in the SMEs credit risk management, that is, market positioninginaccurate, lack of risk control, lack of talent management, performance assessment defects, and absence of credit rating and so on. In view of this, Agricultural Bank of China, Nanchang Branch should improve itself from following aspects, optimize the organizational structure of SMEs credit risk management, improve credit risk managementsystem, strengthen credit risk managementprocess, perfect small customer credit management, speed up financial supporting environment relationship, improve the comprehensive quality of employees and cultivate credit risk managementculture. Since the SMEs credit business is the main area to compete for market share for Agricultural Bank of China, Nanchang Branch in the near future, so its SMEs credit risk management is regarded asthe most important task. Only Nanchang Branch continues to improve its credit risk management system can it meet the requirements of liquidity, profitability and securitysimultaneously.