Study On Risks Of Rural Mutual Cooperatives In Sichuan Province

Among 2016 No.1 Central Document, issues concerning agriculture, countryside and farmers are still put in the first place. CPC has put forward an idea of accelerating building rural financial service system with multi-level, wide coverage and sustainable development. Preventing rural financial risks has been stressed at the same time. As a novelty from rural finance, rural mutual cooperatives is playing an important role in meeting framers’ financial needs and helping them get rid of poverty. Rural mutual cooperatives has achieved a lot since the pilot in 2007,49 rural mutual cooperatives have been approved by China Banking Regulatory Commission and over 5000 rural mutual cooperatives are running by local finance office, agricultural office, supply and marketing cooperatives. As one of the first pilot provinces, Sichuan Province has more than 20 rural mutual cooperatives by the end of 2015.Rural mutual cooperatives have played active roles in several aspects such as alleviating rural financial problems, solving the shortage of agricultural production funds and so on. However, because of the low access threshold, lack of professional service and weak anti-risk ability, rural mutual cooperatives are facing a relatively higher running risk than other commercial financial agencies. Meanwhile, there are not so much accurate measure and analysis of thel risk of rural mutual cooperatives, a series of relative policies deviate from the actual when they are enacted as a result. Based on this situation and available research achievement, this thesis established a risk assessment system of mutual funds combining with the reality of the rural mutual cooperatives referring to Risk Assessment and Early Warning Index System of Rural Cooperative Financial Institutions (for Trial Implementation). Based on the first batch of 8 rural mutual cooperatives in Sichuan Province, using matter element evaluation model and entropy method to quantitatively measure therisk of rural mutual cooperatives, then putting forward some suggestions regarding further lowing therisk level of rural mutual cooperatives.This study implies:mutual cooperatives of rural funds serve as the targeted rural finance agency, whose clients and aims are greatly different from commercial finance agency, resulting in different types of risks have significant differences in their impacts on mutual cooperatives. Capital risks and operation risks contribute more to the overall risk levels, however, less for liquidity risks. In that mutual cooperative is influenced by the period and seasons of agricultural production,and its dependence on natural conditions, different indicators of risk evaluation vary in the risk levels. Furthermore, due to the variations in capital sufficiency, stock structure, the concentrate degree of loan distribution and the professional knowledge and skills of workers, the distinctions among the risk levels of mutual cooperatives are manifest. Therefore, this study indicates that lowering the risks of mutual cooperatives should be achieved in the aspects of government and mutual cooperative:improve the system construction with the help of government; carry out proper supervision; enhance professional training; better the stock structure by the mutual cooperative itself; build credit awareness of farmers; lower the concentration degree of loan; expand the mutual cooperatives appropriately.