Guaranteed Loans Run Mechanism

Joint liability loan is an innovative credit instrument for solving low-end credit market dysfunction. It has a unique operational mechanism and theory. There are complicate interest conflicts and several kinds of asymmetric information among its lenders and borrowers, borrowers and borrowers, and this is the highlighted and focused part of this dissertation. This thesis focuses on the joint liability loan operational mechanism. I applied many kind of discipline such as credit contract theory, game theory, decision theory and information economics theory, etc, taking farmer joint liability loan practice in Guizhou province for example, with the research methods such as combining the normative research with the positive research, combining the qualitative research with the quantitative research, etc, and have carried out my study on joint liability loan client screening mechanism, defensive mechanism for moral hazard and its performing incentive mechanism from both the theoretical and the practical aspect.The main innovations output of this research includes:(1) Client screening mechanism model for joint liability loan was established and its high operational efficiency was demonstrated. Being absence of sufficiency arguments for explaining client screening mechanism operational efficiency of joint liability loan, the borrowers were divided into high ability borrowers and low ability borrowers in this dissertation, based on the established client screening model, the borrowers'behaviors of selecting credit products were analyzed. Conclusions are as follows. When there exist detachable credit products series which are composed of mortgage loan with lower interest, joint liability loan with middling interest and credit loan with higher interest, and the borrowers lack mortgage for their loan, in order to maximize self-returns, the lower ability borrowers willingly chose credit loan with higher interest, the higher ability borrowers would chose joint liability loan with lower interest by constituting the joint liability group. The client screening mechanism is endogenetic in joint liability loan. Joint liability loan can avoid adverse selection and screen clients effectively if the distribution of its information is symmetry among borrowers. The conclusions illuminate the high operational efficiency of the client screening mechanism of joint liability loan and explain that this mechanism can reduce loan client screening fee and adverse select cost.(2) Joint liability loan regulation model for borrowers investing behaviors was established and that "joint liability, dynamic loaning and risk fund" be hold is the foundation for keeping the mechanism highly operating was demonstrated. Based on dynamic game model, the borrowers' investing behaviors was analyzed under different conditions. Conclusions can be show below. Borrowers peer monitor is endogenetic in joint liability. Dynamic loaning reinforces the momentum that the latter borrowers monitor and regulate the former borrowers investing behaviors. Risk fund intensifies the incentive that the former borrowers monitor and regulate the latter borrowers investing behaviors. "Joint liability, dynamic loaning and risk fund" be held and the efficiency of the regulation mechanism for borrowers investing behaviors is significant positive correlativity. The conclusions solve the controversy that "Joint liability, dynamic loaning and risk fund" should be held, and explain that the mechanism can reduce loan monitoring fee and moral hazard cost.(3) Performing incentive model of joint liability loan was established here, it was proved that the comprehensive governments based on "dynamic incentive, law mechanism and substitute-mortgage" is the key of keeping the performing incentive mechanism running efficiently. Based on the performing incentive model, which was set up in this thesis, the borrowers performing behaviors were analyzed in different conditions. Conclusions are as fellows. Because borrower's collusions can not be obviated and infection of breach to faith cannot be controlled, the performing incentive mechanism efficiency is low if the game between lenders and borrowers is one game. Due to comprehensive governments based on "dynamic incentive, law mechanism and substitute-mortgage" sliding over borrowers'collusions and reducing the running efficiency of infection to breach of faith, so comprehensive governments can enhance the efficiency of joint liability loan performing incentive mechanism. The conclusions explain the different outcome that joint liability loan have been carried out in different items, and prove this mechanism can reduce loan management fee and opportunism risk cost.