HY Microfinance Company Risk Management Improvement Research

In recent years, with the economic and social development, financial institutions like bankscould not meet the demand for capital from the economic and social development, causing thedifficult financing for SMEs and individuals, while only relying on the original banking andfinancial systems, the above issue of difficult financing failed to effectively solved. On May 4,2008,People's Bank of China together with CBRC had issued Yin Jian Fa [2008] No.23-theGuidance for the Piloting of Small Loan Companies, which has clarified the nature and legalstatus of small loan companies for the first time. Subsequently, the financial managementdepartments of local government issued the relevant pilot management approaches formicro-credit companies, which laid the foundation for the establishment of micro-creditcompanies. Almost one decade of development of small loan companies has relieved thecredit fund demands from medium, small and micro enterprises.In this context, HY micro-credit Company announced to be established in October 2009, afternearly six years' development, it has achieved excellent economic benefits. With the currentrapid development of the microfinance business, as well as the exchanges of the internal andexternal environment for the operation and development of the company, HY micro-creditCompany meets particularly prominent risk management. The issues of unreasonablecompany organizational structure, incomplete management system, unscientific riskmanagement processes un-standardized lending business processes, incompetent personnelquality and improper risk assessment have deeply hampered the business development for HYmicro-credit Company. Therefore, combining the risk characteristics of microfinance, thispaper treats the risk management in HY micro-credit Company as the target, conducts acomprehensive identification of the risks for the company, based on the detailed analysis ofthe issues in the risk management from HY micro-credit Company, this paper designsoperable risk management plans in aspects of the organizational structure institutional system,risk management processes, operational processes, human resource management and riskassessment. In ensure the effect of the implementation effects of the plan, this paper alsoraises the matching approaches to ensure the sustainable and healthy development for HYmicro-credit Company and provide certain reference and guidance for the risk management inother micro-credit companies.