The Quantitative Analysis Of The Credit Risk Of Rural Banks In Guangdong Based On Risk Credit Model

Due to the difficulties of loans and finance in rural areas, the development of new rural financial institutions is very anxious. On 1 March 2007, Sichuan Yilong Rural Bank which is the first village bank in China officially was opened, it uncovered the history of rural banks to support the development of rural economies. There are 1329 rural banks in China as of February 2016, now the scale has been formed, and their credit financial flows has occupied a place in the rural financial market. It's true that rural banks have the mission to support agriculture. However, the features of Chinese farmers, agriculture and rural areas make agricultural loans with a higher risk so that the independently operated rural banks are facing the challenge of sustainable development.Until now, rural banks in Guangdong have a history of 7 years, the scale of agricultural loans increased year by year. The actual controllers of lots of rural banks mainly are the launch banks. The designs of credit business process, credit rating, interest rate pricing and risk control mechanisms are based on launch banks so that they generally lack the specificity of rural banks. In terms of the bank's internal management: Their ability to defend risk is low, their risk management method is backward and short of talents, post-loan management is not in place. In terms of financial environment: The support of the government and financial supervision measures are not perfect, the lack of agricultural risk compensation mechanism, farmers' credit consciousness. These problems make rural banks face a higher risk of loan defaults and threaten their own financial sustainability. When designing products, rural banks need to estimate the value at risk, measure and predict the maximum loss of loans to provide the reference for lending rates and the sustainable development of bank finance.Since the Credit Risk model requires less data, it's easy to calculate Va R and more comprehensive assessment of the credit risk. This paper selects 1907 rural bank loans in 2015 in Guangdong Province to measure credit risk, and analyzes the reasons for the results at the same time, so three conclusions can be drew as follow:(1) At 95% confidence level the Va R proportion of Guangdong rural banks is 2.89%, the data is 3.23% at 99%confidence level. This value is relatively higher compared with the majority of domestic commercial banks, so rural banks have higher credit risk.(2) In terms of Guangdong rural banks, the Va R proportion of agricultural loans is higher than the total loan portfolio, so the main source of credit risk is agricultural loans.(3) The causes of the credit risk of rural banks in Guangdong mainly include the problems of banks' own management and ownership structure, lack of effective collateral for farmers, weakness of agriculture, inadequate financial regulation and social credit system.Rural Bank's main business is all kinds of loans, the foothold to reduce credit risk should concern about the reasons. On the one hand, rural banks should improve their management systems and equity mechanism, increase the proportion of acquaintances capital, innovate the mortgage and guarantee of agriculture. On the other hand, the government should strengthen the policy support of rural finance, intensify supervision and improve the rural credit environment actively. Related subjects should take internal and external measures to enhance the capacity of rural banks for sustainable development, optimize the financial services in rural areas, enhance the vitality of rural economy and improve the living standards of farmers, in order to accelerate the construction of new socialist rural areas.