A Study Of Credit Risk Management In Commercial Bank’s Public-Private Partnership Projects

PPP (Public-Private-Partnership) is a cooperation mode built between the government and social capital in public service and infrastructures. To the large extent, public sector can solve shortage of fund and technology, lack of administrative efficiency and so forth. Furthermore social capital can break the barriers and effectively utilize capital, technology and management to participate the construction of government communal facilities. As a result, the social capital can get long-term stable investment profit, and have complementary advantages, which can reach a win-win situation.Commercial bank as one of the primary fund offers constructing our national PPP projects. Due to the credit operation of PPP projects not only have traditional credit risk, but also have the long loan period, weakness of source of payment, lots of credit risk possibilities and high correlation of government. These factors give the commercial banks enormous challenges. Therefore, to reduce loss of credit capital effectively and improve the state of operation of banks, strengthening credit risk management of PPP projects is very important.The study has detailed analysis the PPP projects’credit risk management methods and life cycle. Meanwhile, combined with the cases to discuss risk management. In addition, the study proposes seven points for PPP projects credit approval. Finally, five aspects to construct PPP projects credit risk management system were suggested, which are improving PPP projects’access standard and selecting carefully, standardizing the process of PPP projects credit service operation, building PPP credit risk information system, cultivating credit risk culture and choosing risk control methods of PPP mode.