The Small Business Loan Risk Management In Sub-branches Of The ICBC

Difficulty in getting loans for small businesses has long been a problem in China. It also exists in many countries in the world. According to relative data, banks are a main source for small businesses to get financing when they reach some development stage. To solve this problem, banks need to play an active role.Currently, banks in China, especially the four state-owned banks are criticized for small businesses’difficulty in getting loans. Actully, this difficulty partly results from the problems of the small businesses themselves,partly from the emphasis put on risk controling by banks. In the current situation, the competition among banks are fierce. Banks are willing to provide loans for small businesses. But as institutions of risk managing, banks needs to put great emphasis on risk controlling of small business loans.The essay, based on the studies of the present condition of small businesss loan risk management in some branches of the ICBC, mainly gave some suggestions on how to manage small business loan risks for state-owned banks. Firstly, the author gave a brief introdution to the current development situation of small businesses in China, and highlighted their financing conditions. Then the author analyzed the risk elements of small business loans from three dimentions, namely, risks from those small businesses themselves, banks and external enviroment. Secondly, the risk management processes for small business loans were analyzed. The author,based on his own working experience, also gave a further anlaysis on the current risk managing conditions of the ICBC through a case study. At last, suggestions were provided to improve the risk managing conditions in China’s commercial banks, that is, to develop small business financing under supply chain and in special markets. Through these two ways, the problems of information asymmetry and lack of mortgage for small businesses could be solved. In the author’s point of view, to improve commercial banks’ability of small business loan risk management can help banks to enhance their efficiency in issuing small business loans and keep their capital safe. It can also play an active role in the develpoment of China’s small businesses.