Based On Error Correction Model Of Farmers Microfinance Risk Evaluation

In order to encourage and support the policy of "agriculture, countryside and farmers", our government actively promotes part of commercial bank take small loan business to farmers, in order to alleviate this problem. Commercial bank bring loans to farmers on the credit guarantee of farmers themselves, which makes the bank have to undertake corresponding risk, it should pay more attention to the risk that brought by the poor farmers. So the study on farmers'microfinance credit risk of commercial bank, is significant for bank controlling and management.This paper study domestic and foreign credit risk papers, learning the shortage in the existing research and analysis, then produce the ideas, contents and methods in this paper. Secondly, theoretically introduces farmers microfinance credit risk, understand the basic theory and characteristics of peasant households micro credit loans credit risk factors. Then collecting the relevant credit risk evaluation index in the study both from home and abroad, on the principle of farmers microfinance itself characteristics and practical needs, establish farmer microfinance credit risk evaluation index system. We use the correlation analysis, discrete analysis and principal component analysis, and 12 indicators are selected to establish the evaluation index system. Then, based on improved combination, we get the farmer microfinance credit risk evaluation model, this model fitting the multivariate linear regression and Logistic regression curve. According to the minimum error square, establish the combined discriminate criterion model, we add an error into the former combined model, this is the modified model, and then make empirical analysis with the sample farmers'data, after that, we test the sample accuracy, the result show that the improved model is more accurately to make loan decision for commercial bank. Finally, we come to the conclusion.