Research On Controlling Micro-credit Project Risk In The City Commercial Banks

With the sudden emergence of city commercial banks and financial product innovation, microfinance business has become an important new thing of the financial history, the pillar credit products of the city commercial bank gradually and the main profitability channel of the city commercial banks. Microfinance groups are primarily farmers, micro or small and medium-sized enterprises, the main purpose is to provide them with good opportunities for development, get rid of a shortage of funds caused by poverty and backwardness and so as to boost the overall economic progress of society. To conduct microfinance business is not only the key of banking revenue-generating, but also to fulfill the performance of social responsibility. Although micro-credit business developments of city commercial banks have been for some time, China’s microfinance business is still in the experimental and exploration stage. There are still many inadequacies; it is also facing a variety of risks and challenges.How to control the micro-credit project risk of city commercial banks, reduce microfinance funds loss is the major issue that needs to solve. It argues micro-credit project risk control of city commercial banks on the basis of reviewing domestic and overseas research and theories and methods of project risk management. It analyzes the main source of project risk caused by the micro-credit of the city commercial banks and the types of risks; city commercial banks microfinance project risks are summarized for the six categories. It establishes micro-credit project risk assessment system of city commercial banks according to the sources of risk, comprehensive indicators using principal component analysis and evaluates the microfinance project risk of commercial banks using Fuzzy comprehensive evaluation method. Finally, the paper proposes specific measures to control the micro-credit project risk of city commercial banks for the five major categories of the most important risks and sets forth comprehensive measures. This paper argues the micro-credit project risk of city commercial banks has theoretical and practical significance.