Commercial Bank Small Loans Risk Prevention Research

The function and position of the small and medium-sized enterprises in China’s economic development are more and more important. The fund problem of the small and medium-sized enterprises development are paid more and more attention to by all walks of life. Commercial Banks establishing the right loan risk prevention measure in small and medium-sized enterprise not only plays an positive part to small and medium-sized enterprises’ financing, but also has a strong practical significance to the commercial banking industry, whose present profit space is decreasing.The Wu gang baoshang rural Bank is approved by the China Banking Regulatory agencies, the national joint-stock commercial banks. The risks include liquidity risk, credit risk, market risk and operational risk. The formation of these risks related to their service characteristics of the object, such as small-scale enterprises, low management level, weak ability to resist risks. Lack of sound corporate governance structure, management is more extensive; non-standard financial management system, distortion of financial statements.Serious short-term behavior of enterprises, the lack of core competitiveness or the operating characteristics; credit concept is relatively weak, low creditworthiness. External environment and the development of SME credit business and related systems is not perfect, and the commercial banks to their own problems in the expansion of the SME credit business related.To guard against credit risk measures include strengthening legal awareness, and strengthen the awareness of prevention of financial risks; to establish and improve internal risk control mechanism, strengthen the management of credit basisimprove the credit risk evaluation system for SMEs and innovative mechanisms to accelerate the establishment of non-performing assets.