The Optimization Of Risk Control Strageties Of J Company:A Case Study

Since commercialized micro-credit projects kicked off in 2005,they have been developing rapidly in the past decade:the number of micro-credit companies has been increasing drastically,from only several ones to nearly 10,000;the initially non-profit credit agencies have been growing into companies with loan balance of a trillion yuan and with employees over 100,000.As a government-endorsed non-deposit credit industry,it has already been the primary method to legalize private capitals.Micro-credit companies complement conventional banking and financial services effectively and provide loans for tens of thousands of "Sannong"(agriculture,rural areas and fanners),medium-sized,small and micro enterprises,which helps to advance the implementation of Inclusive Financial System of China.From 2008 to 2012,micro-credit industry expanded by leap and bound,and was put in the limelight.Since 2013 it has been suffering bottleneck:bad loan ratio has been increasing nonstop,and many micro-credit companies are faced with the serious issue of "to live or not to live"."How to curb bad loans in order to achieve sustainable development?"---This is the problem confronting micro-credit companies.This paper takes a medium-sized micro-loan company in Jiangsu Province,namely J,as its research object,analyzes the factors contributing to bad loans from all aspects,and attempts to find out solutions.First of all,an introduction of the research background,significance of the subject as well as researching methods is made.Meanwhile,a clear picture of how micro-loan industry develops,as well as the problems and challenges that it's facing is drawn.Secondly,this paper offers a closer look at present bad loan situation in China and analyzes mainly the five factors leading to this bad scenario,respectively----the slump of real economy,the high risk of credit products,the ill-structure of organizations,the defects of risk-control procedures and the low competence of employees.In addition,specific and concrete solutions are presented:1)the transformation of business patterns can help micro-loan companies better adjust to current economic situation;2)the construction of information platform and credit system,as well as the expansion of low-cost capital raising can help to reduce the risk of credit products;3)the reconstruction of organizations and their branches can help to optimize the structure;4)the strict permission setting of shareholders and managers,as well as the optimization of operational procedures can help to improve the risk-control process;5)the differentiated cultivation of ordinary staff and core staff can help to promote the professional skills of employees.Benefiting from the method mentioned above,J Company has already seen some impressive results.Although those experiences of case J may not be extended to every micro-loan company,they can provide some valuable references for those companies who are still seeking transformation and development in vast and hazy.