A Study On Credit Risk Management In Highway Of Changsha-Xiangtan West Line

In recent years, rapid development of highways, which laid a good foundation forthe national economy. Highway construction requires a lot of construction funds. In itsdiversified financing channels, the bank loan is the most important way. Forcommercial banks, security and profitability of credit funds are spent on the primaryconsideration. Although the prospects for the development of the highway industry isgood, different regions of the highway, different operating conditions of enterprises,and different enterprise directors would have an enormous impact on the process ofhighway construction as well as on the operation later. Besides, coupled with its ownindustry characteristics, bank loans are to some degree at risk. To avoid risks, domesticcommercial banks have strengthened the credit risk management.Changtan West Highway is a highway range of Changsha-Xiangtan. It is locatedin the”Golden Triangle” which is composed of Chang(Sha)、Zhu(Zhou) and (Xiang)Tanin Hunan Province,and the”Golden Triangle” is a developed economically、advancedtechnologically、knowledge of high density, and high degree of urbanization region.The construction of Changtan West Highway have an important role to promot theintegration process of the three cities, accelerate the economic development of theregion and Hunan Province. Changtan West Highway project in Hunan Province is thekey highway construction project during the tenth Five-year Plan. Additionally, it isalso the first highway in the form of “BOT”, which introduces foreign capital withinHunan Province. The construction fund mainly comes from the capital raised or loanedby the Industrial and Commercial Bank of China. To ensure the safety of bank creditfunds required to carry out the project management of credit risk.In this paper, we take Changtan West Highway Loan Project as the researchsubject. On the basis of distinguishing credit risk of Changtan west highway project,according to the relevant policies and regulations as well as Industrial and CommercialBank of China’s internal rating law and its loan appraisal rules, and considering thecharacteristics of the highway, such as public welfare, the long investment recoveryperiod and the country’s infrastructure, the paper uses the expert interpretation of “6C”to assess the credit risk of the project. The most likely credit risk in theimplementation process is estimated, and the corresponding credit risk managementplan is put forward.