Research On Risk Management Of Micro-credit Loans Of A Rural Commercial Bank

As the main force of rural financial institutions,rural commercial banks play an important role in the process of promoting rural economic development,and also play a pivotal role in China’s economic development.Rural commercial banks are typical representatives of local commercial banks,which play an important role in supporting local economy,"agriculture,rural areas and farmers" and the development of small and micro enterprises in county economy.Due to the institutional constraints and the influence of external environment,the overall development of rural commercial banks in China is not optimistic,and the non-performing loan ratio remains high in China’s banking industry.Therefore,improving the credit risk management level of rural commercial banks is an urgent task in the management of rural commercial banks at present.The development of micro-credit risk management in China is relatively short,with relatively little theoretical research,especially less attention paid to smaller rural commercial banks.This situation is not conducive to the steady development of rural financial system represented by rural commercial banks in China.How to prevent and improve the management and control ability of credit risk has become the primary task of rural commercial banks.Small and micro enterprises and customers of agriculture,rural areas and farmers generally have the characteristics of small business scale,few fixed assets and poor ability to resist risks,which makes it difficult for them to obtain external financial support from commercial banks or microfinance companies,and they can only obtain loans with low amount and high interest through private lending.A rural commercial bank’s inclusive micro-credit accounts for a relatively low proportion,and there is still much room for improvement.however,due to the rising non-performing rate of inclusive micro-credit,the bank management has to tighten the lending policy.In this paper,a rural commercial bank is taken as the specific research object,and information asymmetry,credit rationing and relationship-based loans are taken as the theoretical basis.by using the methods of literature review,case analysis and summary induction,it is found that the main reasons for the micro-credit risk are credit risk and operational risk,which are manifested in the following aspects: the "three investigations" of loans become a mere formality,the risk management process is imperfect,the organizational structure is unreasonable,the risk management culture is backward,and the prevention and supervision of employees’ moral hazard is not in place.According to the existing problems of A Rural Commercial Bank,this paper puts forward some suggestions to improve the micro-credit risk management of A Rural Commercial Bank by using the relevant theories of credit risk management,combining with the excellent micro-credit risk management cases at home and abroad at present: First,we should improve the products of micro-credit and carry out differentiated marketing according to local characteristics;Second,we should optimize the risk management process and give full play to the role of internal inspection;Third,we must build and improve the risk monitoring and early warning system and improve the early warning content;Fourth,it is necessary to implement the three investigations of loans,strengthen the risk training of employees and improve the means of risk identification;Fifth,improve the performance evaluation objectives and establish a sound performance evaluation mechanism;Sixth,we should cultivate a scientific culture of credit risk management;Seventh,it is necessary to improve the quality of managers,so as to reduce credit risk and improve the competitiveness of banks.In order to help A Rural Commercial Bank improve the risk control of small and micro credit loans,improve the risk management system,and effectively reduce the nonperforming loan ratio,it also provides reference for other rural financial institutions.