Shandong Liaocheng Gaotang Credit Cooperatives In Rural Areas Of Credit Risk Management Research

Rural credit cooperatives are financial institutions that are composed of communal combination of funds by farmers and rural people with the purpose of mutual aid and the principle of voluntary collective cooperation. With the gradual withdraw of major commercial banks from rural areas, rural credit cooperatives is playing a supporting role in rural finance and the sound operation of rural credit cooperatives concern much about the sustainable development of rural economy, the vital interests of farmers, the new major source of funds for construction in rural areas and even the whole harmonious society in China. However, rural credit cooperatives are suffering from the risks of unhealthy elements such as liquidity, operation and management due to institutional, historical and other reasons. Not only these risks go against the development of rural credit cooperatives themselves but also restrict the development of rural economy and the construction of new countryside and a harmonious society. In recent years, the deepening reform of rural credit cooperatives has brought a remarkable development in operation situation. However, the operational risks of rural credit cooperatives are still very prominent, such as high non-performing assets, low Capital adequacy rate, and profit margin. In addition, the lack of long-term management and effective supervision and restraint for the staff results in the abuse of power, fraud, corruption and further loss of assets.This thesis is a study on rural credit cooperatives in China based on a series of analysis of the actual situation of rural credit cooperatives in Shandong Liaocheng Gaotang and the foreign theory such as the New Basel Capital Accord, the U.S. experiences in dealing with bad assets, and thus a further study on the performance appraisal methods as to the reduce of the credit risk, improvement of recognition technology, the innovation of management system and the incentive and restraint mechanisms in internal environment of rural credit cooperatives.