On Strategies Of The Development Of Guaranty Corporations For Personal Consumption Loan In China

Since the late 1990s, credit transaction for personal consumption loan has been carried out to stimulate domestic demand and to promote economic development. It is a brand-new financial product to both the consumers and the society. However, its development is checked by lack of credit in China. Commercial banks adopt a transitional measure to assess personal credit and there are potential risks for the transactions due to the limited transactional resources. Although the establishment of personal credit record and inquiry system is the ultimate solution to the problems of personal credit in the long run, it can not solve the immediate problems. Due to the lack of personal credit in the middle and short period of time, the new transaction at its initial stage is now caught in a bind. As a result, guaranty corporations come into existence.This essay starts its discussion with the introduction to the concept, the organization and the managerial features of guaranty corporations for personal credit, then moves on to briefly analyze the significance of the development of guaranty corporations for personal credit on perfecting China's credit system and introduces the emergence of guaranty corporations for personal credit, the process of its involvement in the transaction for personal credit and its current situation. After analyzing the principles for the cooperation between guaranty corporations for personal credit and the relevant sector in the commercial banks, this essay focuses on the analysis of the actual measures taken in the cooperation on guaranteeing personal credit with a game theory mathematic model, by analyzing the conditions and the probability calculation for the successful implementation of the elements in the decision tree between the guaranty corporations for personal credit and the debtor as the two parties of the guarantee, the essay seeks to find the causes for the risks involved in the model and the deep-rooted causes for the accumulated risks in the cooperation transaction for guaranteeing personal credit. Finally for the problems involved in market relationships, enterprise management, and capital operation, this essay gives some tentative strategies and suggestions in to enterprise regulation and government support.