Research On Financial Risks Early-warning System In Small Loan Companies

Under the guidance of the construction developing rural policy and privateeconomy, private capital have been come into the financial markets. On the one hand, privatecapital captures the financial open opportunities to fill the market blank. On the other handmost private capital have controlled by private entrepreneurs which has also brought riskfactors into financial market.. Small loan company as an important form of folk financialinstitutions, its sustainable development is one of the important subjects today. Firstly,through its lending business services small loans companies mainly service farmers and smalland medium-sized enterprises, solve loan difficult problem of the farmers and small andmedium-sized enterprise due to its weak condition. Greatly promote the regional economicdevelopment and the improvement of living standards of farmers. Secondly, variousmultidimensional management risk of small loans companies cause the difficult ofdevelopment. Thirdly, small loan company as private financial institutions connecting andserving the farmers and small businesses, its safe and steady operation is crucial for socialstability and confidence. Combined with the above three points that: the existence of smallloans company is conducive to the development of social economy, but its safetymanagement is very important. From the perspective of risk I put forward a complete set ofrisk management plan for the sustainable development of small loan company.Through in-depth analysis of the four aspects of small loans company risk, liquidityrisk, credit risk, operational risk and market risk. I built the organization structure of smallloans company and the proposal of the external environment, set up a risk early warningsystem, and gave the use of early warning model in detail, finally puts forward measures andSuggestions of the early crisis. It has been solved that the risk of small loans companycomprise inaccurate of measuring risk, unregulated of standard data collection and lack ofexperience. Risk early warning system is still insufficient due to unclear of the policyguidance and the defects of selected model. The lack of data lead to a realistic question thatvalidity of the model can not be tested in the actual operation. Empirical analysis of thismodel should be made in the future.