Study On The Credit Risk Management Of Agriculture-related Enterprises Based On Futures Market

As the foundation of the national economy agricultural industry has made important contributions to the development of other industries. Since credit funds for agricultural development can not be separated from the support of this, Chinese financial institutions invest a large number of credit funds in agriculture every year in order to promote the healthy development of it. As the distribution of agricultural products, the base digestion rural surplus labor, and promote the new force of economic development in rural areas, agriculture-related enterprises will naturally become the main target of credit investment from financial institutions. However, due to their characteristics of agriculture-related enterprises and the lack of proper management of bank credit and other reasons, there are huge risks in agriculture-related credit,which makes the coexistence of two phenomena including"hard to obtain loans"for agriculture-related enterprises and"hard to loan"for banks. In order to solve the problem of Agriculture-related enterprises'credit risk, this paper is based on the relationship between the binding factors for managing credit risks of agriculture-related enterprises and the functions of futures market. From the point of view of banks, this paper firstly makes use the price information of futures market to establish accredit rating evaluation model based on futures market, in order to make improvement for credit investigation, examination, inspection and control credit risk in time. Secondly, via the analysis of experience of foreign hedging loans and our specific circumstances, proposes the hedging loans for our agriculture-related enterprises with the purpose of reducing the management risk of agriculture-related enterprises and the credit risk of banks. Consequently induce agriculture-related enterprises to make use of futures market to control price risk, increase profitability, advance asset quality so as to improve their financial capacity and effective use of financial leverage for credit behavior. Finally, proposes a number of countermeasures and suggestions for mutual benefit and win-win situation tripartite cooperation mechanisms between banks, futures companies and agriculture-related enterprises as well as the corresponding laws and regulations support.The full text is divided into six chapters:Chapter I, Preface: This chapter introduces the research background, purpose, significance, followed by this paper summarizes the research related to the status quo at home and abroad, and then gives the research methods and technical routes.Chapter II, Theory research on the management of agriculture-related enterprises'credit risk: Firstly define the important concepts including both agriculture-related enterprises and credit risk to define the scope of the study of this article. Secondly, give the relevant theories and methods of credit risk management to supply the theoretical foundation and methodological guidance for the study below. Finally, comment on how the function of our agricultural futures markets plays and how about the cooperation status of banks and futures.Chapter III, Analysis of the constraints factors of agriculture-related credit risk management: From the empirical point of view this chapter makes analysis of the importance of financing support and the demand and supply status quo of financing of agriculture-related enterprises. Secondly, make comprehensive analysis on the specificity of agriculture-related credit risk. Finally, find out the reasons for the failure of agriculture-related bank credit behavior through analysis, the constraints that agriculture credit risk management in is facing.Chapter IV, Study on the credit risk management of agriculture-related enterprise based on the futures market:First of all, make general analysis on the feasibility of making use of futures markets for credit risk management. Secondly, judge from the characterization into the quantitative analysis, build the credit rating model of agriculture-related enterprises based on futures market. Bring the information of futures market into the indicator system, and then make some corresponding improvement on the classification, empowering and calculation methods of credit rating indicators. This paper uses AHP and "fuzzy comprehensive evaluation" model to build the credit rating model of agriculture-related enterprises based on futures market to help improving the credit risk management system of agriculture-related enterprises. Because both the market risk and the credit of agriculture-related enterprises are dynamic processes of change, so the use of price information of futures market with the characteristics of forward-looking and continuity may give warning and dynamic tracking to the credit risk of agriculture-related enterprises. Finally, explore the impact of operations and solvency of agriculture-related enterprises by using hedging in order to use the hedge of futures market to solve the practical problems that the credit resources of enterprises are lack and the banking credit risk of agriculture-related enterprises is large.Chapter V, the strategies and recommendations of credit risk management by using futures markets: Through bank credit evaluation system use the reverse information transmission mechanism induce agriculture-related enterprises to participate in futures markets. Propose a number of countermeasures and suggestions for mutual benefit and win-win situation tripartite cooperation mechanisms between banks, futures companies and agriculture-related enterprises as well as the corresponding laws and regulations support.Chapter VI, the summary and outlook of the full text:This article put forward two ways in how to use futures markets to manage agriculture-related credit risk from the theoretical analysis and feasibility point of view, namely, the use of futures markets to improve the credit rating assessment of agriculture-related enterprises and the use of hedging loans. However, to operate on specific micro-level studies there are only some recommendations for exploratory operation, to give the specific implementation of the process there may be a variety of obstacles and bottlenecks, so we also need further and deeper studies.