The Countermeasures Study On The Development Of Farmer Credit Loans In The Agricultural Bank Of China, Baicheng Branch

Since the reform and opening up, China has made remarkable achievements onthe rural economic and social development, but the contradiction of urban-ruraldualistic structure is still very serious. The agricultural base remains weak. Ruraldevelopment still lags behind. It is difficult to increase farmer’s incomes yet.Agricultural Bank of China has paced other financial institutions offering services byactively bringing its superiority on banking outlet, network and technology into fullplay. Whether it’s able to efficiently control the risks and exploit a sustainabledevelopment road has become an important criteria to test the success or failure ofABC’s service on agriculture, farmer and rural area.On the perspective of enterprise risk management, this article introduces thefarmer credit loans and risk managements in BaiCheng branch. Firstly, to managecredit risk, BaiCheng branch actively adjusted and optimized the structure of farmercredit loans. The branch has established the mechanism of exchanging information,the mechanism of punishing defaulters and the mechanism of diversifying risks. Thebranch has been strengthening the process of farmer credit loans. Secondly, tomanage operational risk, the branch organized the lender officers team andestablished the mechanism of detect, asset and manage risks. Thirdly, to managereputational risk, the branch has been propagandizing marketing scope and accessrequirements, concentrated marketing, strengthened supervision by the public andestablished the mechanism of reputation management.Through analyzing the current situation of farmer credit loans, I found there arefive main problems. Firstly, the conflict between its operational ability and itsscattered and small customers still exits which hindered the further expansion of the loans. Secondly, its social benefit is not obvious. Thirdly, the risk managementsystem isn’t running perfectly. Fourthly, there are many shortcomings in internal riskmanagement system, especially structural deficiency in human resource. Fifthly, thehomogenization in financial products exists.In the last part I offer five countermeasures for the sustainable development offarmer credit loans. Firstly, the branch can cluster the service subjects and changeretail business into wholesale business, especially realizing region concentration andindustry concentration. Secondly, the branch can integrate urban and rural services toachieve “two-wheeled drive”. It could set up financial chain service, support theadjustment of agricultural production structure, develop animal husbandry loanspeasant self-employed loans which encourage the surplus labor force enter townsand service small enterprises to promote the development of secondary and tertiaryindustry. Thirdly, the branch should be more meticulous in its internal controllingand strengthen its service basis. It must organize a qualified lender officer team,solidify regulations and process which be sure they are standardized and efficient.And the branch must be at the high level of automatic management. Fourthly, thebranch must provide characteristic services to adapt the market. It must havepreponderance in product structure and development strategy. On the “three-personjoint guarantee” basis, the branch should expand its loan business on fiscal directsubsidy guarantee, commercial housing mortgage, agricultural and sideline productsmortgage.“Four rights” mortgages can be carried out steadily as well. Expand thescope of collateral could benefit farmers and ease the difficulty of loan. Fifthly, thebank should apply IT in its services channels to extend service space. It shouldallocate resources to the E-banking business, implement the integration with externalresources and work closely with other banks.