Internal Entrustment Loan's Profit And Risk Study

Due to information asymmetry,high transaction cost,obvious financing constraints and lack of financing channels in external capital market,many enterprise groups began to build internal capital market to optimize internal resource allocation and improve the utilization efficiency of resources.As an important trading mode of internal capital market,entrusted loan is emerging quietly in listed companies.Based on Baobian Electric and Kailuan Energy Chemical Corporation,this article's main research is the feature of group internal entrusted loans and benefit and risk study from the whole group,the loaner and the lender.This paper's innovation is to distinguish the group internal entrusted loans with external entrusted loans,study the benefit and risk of entrusted loans from the perspective of whole group,the loaner and the lender.The research thought of this paper is to introduce the characteristics of internal entrusted loans and analyzes its benefits and risks from the three aspects of group,loaner and lender through literature research,case study,qualitative and quantitative research methods.Finally,the author puts forward some suggestions and measures for the risk of internal entrusted loans.The expectation of this paper is that the internal entrusted loan has the characteristics of short term structure,low interest rate level,and capital allocation in line with company strategy.Secondly,internally entrusted loans have two sides,which can bring benefits as well as increase risks.Hence,corporation must take measures in advance to control the risk of entrusted loans.This paper is a useful expansion of the research on internal capital market theory and the research on entrusted loan,and it has certain guiding significance to practice.For example,when corporation is in high risk industry or try to move to new area,it is better to use entrusted loan carefully to avoid triggering a more serious financial crisis when the real economy suffers.