The Theoretical And Practical Research Of Risk Management Of Automobile Credit

With the opening of the market and transition of people's consuming idea, the automobile credit demonstrates enormous potentiality and wide market prospects gradually in our country; it has aroused great concern from auto industry, banking, insurance and consumer. Developing the operation of automobile credit can not only utilize the auto industry to drive such development of the industry as steel, chemical industry, textile etc., can also promote the development of such trades as the traffic, travel, diet etc. it can drive the national economy in an all-round way. This kind of service method has offered an effective way for manufacturing enterprise of the automobile, which would taken a brand-new and unexploited customer market to the auto industry, it is favorable to the development and growth of the Chinese automobile market. But we should see, in case of not setting up an intact risk management systems, there are some questions and difficulties to launch automobile credit, for example the bank can't grasp the true material of the debtor who defrauds it of the loan seriously. But this should not become the reason for denying or suspending the automobile credit, the automaker, distributor, commercial bank, financial company of automobile has responsibility to cooperate each other, to set up a system of automobile credit which can prevent the risk in order to promote sound development of the automobile credit of our country. I. Summary of the automobile credit risk management i. Meaning of the automobile credit risk management Automobile credit risk management means loan organization use a systematic and normative method to discern, measure, control and dispose various kinds of risk. Its purpose is to disperse, reduce and shift the risk through effective management, make credit risk degree of the loan organization in stable state in a short time and in minimum state in long term in order to ensure the security, mobility and profitability of the credit assets. ii. Comparative analysis of the current situation of credit risk management of domestic and international automobile Automobile credit serve abroad have a history of one hundred years, foreign auto credit risk management mode is credit assessed attached vehicle property mortgage, namely to give consume a standardized credit assess which determines whether to loan or not and concrete arrangement of the loan, then make mortgages with the property right of the vehicle that the debtor purchases. The method of controlling risk has greatly promoted the development of the automobile industry and financial circles in developed country. The automobile credit of our country appeared in 1995, in recent years. With the constant intensification of the consumption demand of automobile, the commercial banks, automobile distributors, financial company of automobile introduce the automobile credit one after another, which make it developing fast within shorter time. The serve subject of automobile credit in our country make credit assess as main tool of weighing risk, according to one's owns accept degree different service subject make different credit assess standard and require the debtor to offer the corresponding loan mortgage, so as to control the risk in the course of credit. Whether as a whole, there are two differences about automobile credit risk management between our country and foreign country. First, it is the environmental difference of laws and regulations system of the macroscopic. There is no special automobile credit law of our country at present, mainly through some provisional regulations to mediate the relation of the automobile credit. It is very difficult to reach the corresponding management result. Second, it is micro level difference of service subjects of the consumptive credit. Serve subject of our country cooperated with insurance company to take control the risk within a very long time, not bared the corresponding risk management responsibility, in a situation that the risk management subject is lacked, the defect of risk management is exposed which has hindered the development of the automobile credit. II. Theoretical research of risk management of the automobile credit The theoretical research of risk management of the automobile credit includes four respects mainly, namely the risk discerning, the risk measuring, the risk controlling and the risk treating. i. The risk discerning The risk discerning is to judge, analyze the type and produced reason of potential risk,in order to realize the measurement and treatment of the risk, it is the qualitative analysis of the risk. To distinguish which kind of risk does the credit course have, the credit personnel must analyze the debtor's current assets, real estate, income and debt state, the result is often reflected through a balance sheet, this form simplifies the customer's personal financial information which can help the loan officer find the customer's credit risk and its produced rapidly, and offer the decision basis in order to grant the automobile loan to this customer. ii. The risk measuring The risk measuring is to weigh what degree every factor influences the risk to on the basis of the risk is discerning by the risk administrator, to specify and quantify the risk degree. Foreign automobile credit organization generally adopts analytic approaches of loan risk degree in risk measuring, this kind of method regards assessing in personal credit and assurance as the foundation, confirms the risk through the assessment value of the two. Personal credit assess is to adopt the method of synthetically assessing, to specify and quantify the various kinds of attribute which would influence the personal credit, to analyze, examine and assess one's debt paying ability, prestige state, respects degree etc., then to confirm their credit grades according to the mark. Assurance assess is to confirm the corresponding grade of risk according to the risk degree of different way of loan guarantees. Because under certain conditions personal credit grade of risk factor and loan way of risk factor can complement, the two determine the risk degree of loan together, so we can express loan risk degree with the product of personal credit risk factor and loan way risk factor, so as to measure the risk. iii. The risk controlling Risk controlling is to take different measure and method to different kinds and scale of loan risk, make loan risk losses that may be produced reduce to minimum extent. There are two kinds of method that will be commonly used to deal with risk during automobile credit: prevent from loan risk and shift loan risk, which means to control the risk through the way of insurance and guarantee. This step still includes the supervision of the business activities and checks, take the proper measure of correcting to inappropriateoperation, it can disperse and transfer lose to other respects through certain method, or get certain remedy and relieve. iv. The risk treating The risk treating means when the debtor can't repay loans and interests on time, the loan organization will flexibly urge the debtor according to the concrete reason and overdue time of loan to take possible loan and reduce losses of the loan. There are mainly the following several ways: through telephone, doorstep, by regaining mortgages, applying for the insurance claim and courting. III. Demonstration research of risk management of automobile credit of our country There are three kinds of serve subject of automobile credit of our country: commercial bank, automobile distributor and financial company of automobile. Different service subject takes different risk control method in the course of automobile credit. i. Risk control method of the First Automobile Finance Co.ltd. From the development of business of the First Automobile Finance Co.ltd, it controls the risk from the following aspects mainly. First of all, to set up the reasonable framework of organization of automobile credit risk management and tight operation procedure, to implement management system inside are the foundations to expand automobile credit. Secondly, guarantee by the distributor. The financial company confirms the cooperative distributor's qualification according to the request of risk management and then requires the distributor to guarantee for the debtor. Moreover, require the debtor to offer counter guarantee to the distributor. There are two ways mainly: the vehicle or house property mortgage, the third party guarantee. Finally, managers stationed abroad follow and check distributor's risk management situation. The managers stationed abroad will telephone or have a visit to investigate the customer in the course of loan, confirm debtor's name, the amount of money, and use of the car etc., so as to ensure that the content of the loan is true, prevent the distributor from utilizing the debtor's materials to defraud of the excess loan. ii. Risk control method of the commercial bank In the automobile credit that the commercial bank launches, the bank faces thecustomer directly and then signs credit agreement with customer after evaluating his credit. Customer will return loans and interests after the purchase within time that the bank stipulates. In the course of credit, the bank has made a strict regulation to debtor's qualification and required the debtor to offer a guarantor who has certain economic strength and vehicle mortgages at the same time, banks regard this as the main means to evade risk. iii. Risk control method of the distributor Make Yafun automobile company as an example, it mainly controls the risk through perfect personal credit management system which includes personal credit level investigate and appraise, personal credit state control, personal credit risks handle. In addition its professional advantage of automobile service does well in controlling personal credit. While realizing serving marketing, it has finished the surveillance of personal credit state too, so as to realize risk management. IV. The countermeasure and suggestion to set up the risk management system of automobile credit of our country i. Perfect the legal system of the consumptive credit At present there is no intact legal system established to the consumptive credit in our country, the development of the consumptive credit lacks strong legal support. For this reason, we must perfect the legal system of the consumptive credit and set about mainly from the following respects: First of all, revise and perfect such corresponding clauses about consumptive credit in the regulation as " Assurance Law ", " Contract law ", " Loan rule "etc., make it promote the development of consumptive credit. Secondly, establish the legal status of risk management of the consumptive credit, plan and perfect the legal system of risk management again. Finally, there should be a perfect mortgages and assurance system. ii. Perfect the personal credit rating system Perfecting the personal credit rating system should start with the following respects: First, establish the legal environment that can help to build the credit rating system. Second, there should be a perfect personal credit investigative system. Set up such personal credit information networks that include of the commerce, tax, insurance, public security etc. Third, standardize the assess system of personal credit. Assess standard...