Study On Management Improvement Of Farmers Micro-Credit Loan’s Risk In Credit Cooperatives Union Of Xiangtan County

Farmers micro-credit(FMC) was popularized in2001and worked as a special financial instruments for the rural area. Over many years, FMC has played an important role in spurting rural economy development, increasing farmers’incoming, developing agricultural credit services, and becoming the flagship of supporting agricultural and benefit farmers of Rural Credit Cooperatives (RCC). But practice shows that the rural credit institutions to promote FMC has not received good results, a large number of non-performing loan in credit cooperatives has seriously affected the motivation of rural credit institutions issuing loans to farmers, and became one of the constraints of sound and steady development of RCC. Currently,rural population of China still in the stage of slow income growth, large proportion of consumer spending, less capital accumulation and seriously lack of collateral, it is difficult to meet modern commercial bank financing conditions and barriers to entry. Therefore, studying risk prevention ways of FMC are significant to deepening rural financial services, and promote sustainable development of rural financial.This article studies the sample of Xiangtan Rural Credit Union, analysis the risk management of FMC. Xiangtan Rural Credit Union as one of the main local rural financial institution, its market share of deposit and loan is about50%. By the end of2011, Xiangtan rural credit union has issued49000numbers of FMC with the90.7%to the total, the loan balance is415.64billion Yuan with the270.71billion Yuan bad loans in FMC, NPLR of FMC is65%with54.8%to total NPLR balance, The degree of risk is much higher than other types of agriculture-related loans, and also higher than other local banking institutions in the same type of loans. It is very representative to study the risk management of FMC.This paper starting from datas of the institution, analysising the continuity of longitudinal change of the datas and comparison other banking institutions to comfirm the features of FMC. Then we take the forms of questionnaires, field visits, from the aspect of concept of credit behavior of the parties, institutional business process design and risk management system, integrating Agricultural insurance, credit system and fiscal policy, to research risk factors of FCC of Xiangtan rural credit union. The results show that credit risk and operational risk are the major risks of FMC. We proposed measures and the implementation of path from Dimension-reduced,risk decreasing and relevant measures, helping to establish a virtuous cycle between FMC demand satisfaction and credit funds security, and safisfacting the objectives of rural services and business benefits.