Farmer Loan Risk And Prevention

China is an agriculture country, but its rural economy lags behind other countries. Though China’s financial department has constantly increased the capital investment in the issues of agriculture, such force is still not enough to change the overall rural appearance. Farmers are the main body of rural production and the key elements of the rural economy development. The agriculture, the farmer and the rural must be supported by finance. The government once again endowed Agricultural Bank of China(ABC) the significant responsibility to serve agro-related sectors after ABC introduces its reform on the joint stock system in 2007. ABC has been exploring more innovative products to serve agro-related sectors. Among which farmer loan becomes one of important; Whether ABC could sale this product well, and whether it can bring profit to ABC is become important issue to the ABC’s development. It is in this context, we select a county of Shandong province as a case study of peasant household loans risk., and hope it can provide theoretical and empirical support for developed regions and even other counties risk loans to farmers.For the peasant household loan risk research, this paper is formed by seven parts, the first part mainly introduces the research background and research significance, related research at home and abroad, the deficiencies of present research, this paper intends to solve the key issues, research methods, the framework and main content. The second part is theoretical basis of microfinance including farmers, loan and the way of farmer’s loan. Furthermore, this paper summarizes the theoretical basis of the peasant household loans, which including how the bank coordinate between the financial needs of the farmers, the rural financial system reform, and the agricultural bank reform innovation,these demonstrates the necessity of the development of peasant household loans. The third part analyzes the current development of A county farmer loans. It mentioned the situation of the rural finance of A county, the basic situation of farmers loans of A county ABC bank. The fourth part analyzes the peasant household loans risk of A county agricultural bank from the credit risk, management risk, policy risk, and environment risk. The fifth part from the repayment capacity and willingness to reimbursement in the face of farmers loan in risk assessment, and according to the two aspects of segmentation evaluation index risk assessment model is established, and the proposed risk assessment scheme and pre control mechanism of the Agricultural Bankof China A County branch.The sixth part is the peasant household loan risk prevention and control measures. Finally, according to the above analysis, the paper respectively put forward corresponding countermeasures corresponding to credit risk, management risk, policy risk, environment risk. The sixth part forcast the trend according to above analysis of the agricultural bank of A county branch loan risk, and to the trend of the development of the agricultural bank of peasant household loans.This paper analyze different type of risk when A county branch provide loan to peasant in theory and practical, then give some suggestions. In the aspect of credit risk, on the one hand, need each department to cooperate and jointly build a credit system, on the other hand, Banks should strive to provide the better service innovation. In terms of risk management, to establish a complete and scientific system, and strictly enforced. Banks should promote the level of risk management constantly in the process of before loan management and after loan management. In terms of policy risk, on the one hand for government policy to support the financial authorities, on the other hand is to strengthen coordination and communication with government departments and other partner agencies. In erms of environmental risk, from two aspects of natural risk and market risk, put forward the corresponding countermeasures.