Study On Risk Control Of Rural Micro-credit In The Underdeveloped Areas Of Our Country

In terms of general, micro-credit refers to credit financial services that dedicatedto the low-income groups or miniature enterprise provide low volumes. The coreessential factor of micro-credit is that the object is the poverty groups or the lowincome social stratum. Therefore, it acts from beginning to end with a social standardor support the target value of vulnerable groups to help. Rural micro-credit refers tothe micro-credit which object of the credit is farmer, rural industrial and commercialhouseholds and rural enterprises. The basic theory of rural micro-credit mainlyconsists of traditional agricultural financing theory, rural market leading theory andimperfect competition market theory.The credit risk refers to the possibility that credit borrowers can’t on time fullspecified amount payment leading to financial institutions cannot be paid back in fullthe principal and interest on schedule and causes damage, or financial institutions tobear loss caused by internal and external factors. If we want to give rural microcreditsustainable development, we must be on the credit risk of commercial Banks orfinancial institutions under effective control.The rural micro-credit development and risk control in the less developed areasin China cannot get rid of a particular financial environment restriction and influence.The Characteristics of the rural financial environment in the less developed areas inChina includes, underdeveloped rural areas of financial risk is higher than other areas,masses of farmers to rural financial institutions lack of correct understanding andfailing to carry on the effective supervision, rural financial institutions relativelyinsufficient ability to resist financial risks. Underdeveloped area in our country ruralmicro-credit risk types includes credit risk, management risk and interest rate risk.In the aspect of credit risk control problems, rural micro-credit business in the less developed areas in China mainly show that, farmers in their own economic abilityserious low, the farmer credit lack of consciousness, farmers’ external environmentpressure is too large; In the aspect of management risk control problems mainly showthat, credit investigation work does not reach the designated position, unreasonablecredit grade rating, no strict post-loan supervision measures; In terms of interest raterisk control problems mainly show that, Set out are not allowed to credit costs, higherinterest rates, lack of compensation mechanism and so on.In underdeveloped areas of China, the suggestions rural on micro-credit riskmanagement include: in the aspect of credit risk control, we should improve farmers’credit awareness, all-round construct to support service system and carefully handlerelationship with local government. In the aspect of management risk control, weshould optimize and standardize credit investigation, substantively examinemicro-credit application and implement dynamic credit archives management. In theaspect of interest rate risk control, we should strengthen internal managementmeasures in order to save resources, establish scientific mechanism of interest ratedetermined and explore the construction of risk compensation mechanism and so on.