China's Commercial Banks And Student Loan Business Risk Analysis And Management

Government subsidized educational loan (GSEL) is a kind of beneficial creditloan, which is launched by our nation and promoted by central government andprovince administration. The loan is provided by commercial banks throughbidding. The aim of the loan is to release student's burden of tuition fee,dormitory fee and other maintenances pertinent to university life. Thesestudents include college students, university students and second degreestudents in need. It has been seven years since it was put into practice. Theperformance however is far from our expectation and the development is slow.The article is trying to find out the main reason blocking the process of GSELthat is the unwillingness to release the loan from commercial banks. The rootcauses are credit risk hard to control: asymmetric information and credit failureetc. Expect for the improvement of our credit condition, commercial banks needmore flexible financial product. Finally, considering our foreign deposit andthe supportive policy promoting creational application, the article figure outa model --the surplus could be set up fund to reduce the further risk. Also discussthe feasibility of such model.