Research On The Credit Risk Management Of Rural Cooperative Bank Of Hedong

Rural cooperative financial institutions as the core of China’s rural financial ties, are the main force of rural finance, which have a crucial role in rural finance activities, play a crucial role in rural services and promote rural economic development. China’s rural financial market is still on a developing stage. The credit business is the most important business of the rural cooperative financial institutions, while credit risk, which includes the level of credit risk, operational risk, market risk, compliance risk, is one of the most important aspects of the operation and management. However, due to reasons of history and reality, the credit risk of the rural cooperative financial institutions is mainly operational risk. On the one hand, rural cooperative financial institutions have imperfect corporate governance structure, heavy historical burden, weaker capital, the overall management inefficiencies and other problems. Simultaneously, the extensive management mode and inefficient means of risk control is difficult to adapt to the rapid economic development needs. On the other hand, as the country relaxed rural financial market access threshold, the state-owned commercial banks, joint-stock banks, city commercial banks, and postal savings banks have continued to increase county branches in recent years, which severely impact the rural cooperative financial institutions as they regard the country economy as the main target customers groups. Now, rural cooperative financial institutions face unprecedented challenge.Rural Cooperative Bank of Hedong also faces similar challenges. As a rural cooperative financial institutions, through years of development, it has developed into the main force to promote the development of local financial and to support and benefit the farmers, in Hedong District of Linyi City. But with the gradual increasing of local financial institutions in Linyi, the market competition becomes more and more severe. As a small and medium-sized rural cooperative financial institution, Rural Cooperative Bank of Hedong has a weak accumulation of capital strength, a higher proportion of non-performing assets, and the talent "fault". Such problems as lack of internal management level are also gradually revealed. What’s worse, it’s market share is gradually nibbled by various financial institutions. In addition, the future development of Rural Cooperative Bank of Hedong has been gradually compressed. Accumulation of credit risk is also increasingly becoming an obstacle to restrict the development.Based on the commercial bank management theory, the thesis summarizes the related research of domestic and international banks’ risk management theory and compares the other commercial banks’ credit risk models and rural cooperative financial institutions in the current credit risk model differences. With the method of the survey analysis, literature research, case study method, the article analyzes and summarizes the major problems and deficiencies in the current credit risk management, combining with the actual development of Rural Cooperative Bank of Hedong. After sorting out the credit risk management theory, I find various quantitative models are designed from the point of the dimension of products and customers planning. Besides, the quantitative models are used to identify, measure and control the risks. The theoretical research is being transferred into micro-adjustment and science-oriented study. Therefore, the existing theory is difficult to bring forward advice on improving the development of rural cooperative financial institutions. In view of this, the author with banking experience of more than10years, combined the development of Hedong Rural Cooperative Bank, building from the customer choice system, business processes, job setting, risk control measures and the appraisal system, and tried to set up a close-practical, workable, relatively well-established and effective risk control process. The article is meant to help sophisticate the credit risk management of rural cooperative financial institutions and promote the development of them.