Research On Risk Control Of Financing Guarantee Company Business

The gradual improvement of China’s Market Economic System and continuous enhancement of development of the Market Economic System present the importance of small and medium enterprises (SMEs) in providing employment opportunities, promote economic development, promote innovation, and maintain social stability. SMEs need to keep growth financing in order to achieve fast development; However, because of China’s antecedent policies and systems, as well as SMEs in particular private SMEs’own conditions, difficulties of financing have become not only a bottleneck restricting the development of SMEs but also a key factor in constraining sustained and rapid economic growth. The competition amongst SMEs is very fierce. Because the profit margin of SMEs’net asset is low and their profit accumulation cannot meet the needs of its rapid development, bank credit funds become the main source of finance for SMEs in China. However, in the context of the development of China’s market lagging behind, bank credit funds tend to flow to large enterprises. In addition, due to the information asymmetries between SMEs and banks, SMEs fall into an awkward position in bank financing. In such an environment, finance guarantee corporations came into being. The emergence of the financial guarantee companies effectively mitigates bank credit rationing and provides a more effective way to solve the financing difficulties of SMEs. China’s financing guarantee industry has been developed for some time, but because of the late start, many problems within the industry exist and finance guarantee companies face a lot of risks. Looking at the history of the development of the entire financing guarantee industry, financing guarantee companies went through a period from initial booming, to the winter that is hard to fight against, to few survival after industry reshuffle. Financing guarantee company is different from the traditional industries; they manage risks and a compensatory project can destroy the hard-won accumulation of the company without being extremely careful when comes to risks.This article researched on risk control and prevention mechanisms on financing assurance projects in financing guarantee companies in improving risk control and prevention mechanism, and promoting risk control system and risk prevention of the financing guarantee companies. This paper starts from the current domestic financing guarantee conditions combined with theoretical analysis and practical application, introduces external and internal risks in development of a financing guarantee company, absorbs advanced theories and methods of risk management, sums up author’s work experience in financing assurance, improves the risk control and prevention mechanisms of financing assurance projects, provides a practical and effective method of guarantee risk control and prevention with real cases.This article is divided into five chapters are described:the first chapter is an introduction, first describes the background and significance of this article, followed by the guarantee industry at home and abroad research, the content of this study, ideas and innovation of this paper. The second chapter introduces the domestic security industry development and the main problems. Chapter first analyzes the security company to face internal and external risks, followed by a financing guarantee company risk control focus, and concludes with the specific operation of the financial guarantee business risk control methods. Chapter by case analysis, the use, in order to achieve the purpose of theoretical and practical combination of Guarantee Corporation of Anhui W guarantee. Chapter as part of the conclusion of the conclusions of this study, and put forward a number of policy recommendations.The innovation of this article is different from the previous research has focused on security companies in the country funded the establishment of policies guarantee company and the main draw to sum up the experience of developed countries in the West, the author of this article combined with work experience in Anhui W guarantees, combined with the ory, sum up experience, the actual operation of the business financing guarantee company in China to provide financing guarantees for small and medium-sized enterprises, the specific risk control methods, and applied to actual cases, to a certain extent to the theory and practice purposes.