Research On Credit Risk Of Rural Micro-credit By Commerical Banks

Appeared in the1970s, Bangladesh, microfinance-defined as efforts to improve access to loans and to saving services for poor people-may be the fastest-growing and most widely recognized new anti-poverty tool. The success of the Grameen Bank initiated academic study and national rural finance practices. Microfinance aims to provide financial services for the poor, not only is in assumed the task of poverty alleviation in rural areas, but also is an innovative financial instrument.Since the1990s, the concept of microfinance was introduced to China, after decades of development, microfinance has achieved some success, actively promote the development of the rural economy. Rural microfinance is the solution to Chinese "three dimensional rural issues". There is rapid development of microfinance institutions, it formed a wide range of micro-credit system, but it also exposed many potential problems and risks, particularly the credit risk of microfinance.Considering the so many participants, the power of non-equilibrium, incomplete information, that’s difficult to achieve perfect information and perfect competition in China Rural Micro-Credit market. The introductions of game theory, in large part explain a variety of rational and multiple effects of thinking rural microcredit market. The participants of the game for its own interest, and embody the supply and demand for both parties not complete information dynamic game relationship.This paper is divided into six parts:The first part introduces the basic situation of microfinance, the background and significance of this paper; the second part is the literature review of theory and practice of microfinance, and the introduction of research methods-game theory; the third part gives an overview of rural microfinance, including microcredit definition and characteristics, the development process and status of microcredit, etc.; fourth part is based on the credit risk theory, analyzed the risks faced to the microfinance, especially the credit risk and its formation mechanism; the fifth part established the game model, analyzing the supply and demand sides’behavior; part six concluded with rural microfinance credit risk prevention measures and strategies.