An Analysis Of Rural Credit Cooperative Loans For Herdsmen's Settlement In A Prefecture

Settlement of Herdsmen is becoming an inevitable trend with the overall development of pastoral area's economy and society. In the process of settlement, houses construction is fundamental. However, due to the limited local economic condition, herdsmen need financial support from different channels, including loans from credit institutions. The Rural Credit Cooperatives (RCC) in A has been actively participating in the settlement. program of herdsmen in Sichuan province through providing loans to them. Some existing researches show that providing loans to herdsmen for their settlement are basically mandatory bureaucratic behaviors. It just offers a simple combination of funds. This does harm to the RCC and makes the risk out of control.Before engaging in such a large-scale and widely-covered program to provide loans for the settlement of herdsmen, RCC should resolve inevitable problems concerning necessity and feasibility. Herdsmen's settlement features as a government-promoted program, and therefore debates exist when RCC participates in it. It is difficult to define the role of RCC as a mandatory bureaucratic behavior or a market-based voluntary involvement. Although the RCC in A has been the exclusive loan provider for herdsmen's settlement program and it seems unnecessary to discuss its necessity, a fact must be made clear is that pastoral areas in China do not exist only in A, but also in other areas such as south west and north west. The settlement program also is not exclusive for Sichuan Province. Thus, to ask that.whether banks should be involved in this program and provide necessary loans are also of great necessity.Built on a narration of the basic situation of loans for herdsmen's settlement and the basic theory of agricultural loans in the system of a RCC, this article provides an empirical analysis to discuss the loans for herdsmen's settlement in the RCC in A. It applies the theory of strategic decision and competitiveness knowledge to analyze the strategy selection and competition situation in RCC, and reach a conclusion that providing loans to herdsmen for their settlement meets the strategic choice of the RCC in A and shall help increase its competitiveness. It is not merely a pure government-oriented behavior, but also a voluntary choice for the self-interests of RCC.After solving the problem of necessity, it is also necessary to analyze the real situation concerning providing loans to herdsmen for their settlement. Because the original loans of RCC in A is relatively small, the engagement of settlement program is of crucial importance for the business development and risk management in RCC. Therefore, to observe the actual operation methods of RCC in the business featured with high-level of scale, cost and risk, and to analyze its existing shortcomings and risk points are very urgent for a better lending and risk management. Based on the elaboration of the actual situation of providing settlement loans to herdsmen in A and the analysis of the internal and external factors that impact risks management within RCC, especially shortcomings existing in the process of loan granting. and managerial operation, this article refers to research experience in micro-finance, and proposes a six-dimension management tactics, including selecting loan objects, appropriately pricing, elaborating risk management, specifying business decisions, business publicity and staff team building. Besides, it also gives suggestions about the construction of external environment for the RCC to develop the settlement loans for herdsmen.