Research On Credit Risk Management Of Mircofinance Companies In Laoshan District

As a financial activity aiming to support the poor and promote economic growth,micro-credit immediately gains rapid development among the whole world and gradually becomes a universal financing mode.In 2005,China launched the pilot work of microfinance companies.With the continuous expansion of market demand and the introduction of support policies,the development of China's microfinance industry as a whole is good.Especially referring to three rural,small and medium enterprises and individual industrial and commercial households,the effectiveness of poverty alleviation is remarkable.But since the fourth quarter of 2015,the pace of development of microfinance industry in China is slowing down.The first half of 2016 is the first time in the history that the main indicators of development of the industry overall showing negative growth.So it draws a lot of attention that how to avoid risks and achieve sustainable development for microfinance companies.The pilot work of microfinance companies in Laoshan District began in 2011.Under the circumstance of the rapid rise of financial industry in Laoshan area,Laoshan microfinance companies developed rapidly and has played a positive role in regional economic and social development.However it encountered many difficulties in financing,high risk,heavy tax burden,lack of supervision and other issues,especially in recent years,the microfinance industry in Laoshan has a certain degree of industry atrophy,credit risk has become a major problem in the progress of the development of microfinance companies in Laoshan District.This paper bases on theories of credit risk and risk control,providing a reference of credit risk management and control for Laoshan microfinance companies through the investigation of the development situation,characteristics,major risks and their causes and evaluation mode.This paper first introduces the historical background of domestic and foreign development of microfinance companies and the related theoretical research results,and discusses the credit risk and management problems faced by the development of microfinance companies in Laoshan District.Then,refine the impact of various types of credit risk factors by using analytic hierarchy process and establish an evaluation model to quantify the risk weight of each factor,and then use the quantitative results toevaluate the credit risk.Finally,based on the evaluation results,the paper puts forward the countermeasures and suggestions to strengthen the credit risk management of microfinance companies in Laoshan Districts.