Research On Order Financing Risk Control Of JK Company In Bank Of China Weihai Branch

The trend of trade financing in commercial banks is from traditional trade financing to the new type of supply chain financing. Order financing is one of the important products of supply chain financing. With the signed orders with downstream core enterprises, the enterprises can apply to the bank for financing for stock, production and transportation. Order financing has played a positive role in helping enterprises to complete orders and promoting economic development, especially the development of foreign trade. In the past two years, the economic downturn has caused the enterprises difficulties and bad bank loans. Commercial banks have to raise the threshold of order financing. As a consequence, the enterprises find it more difficult to get financing from banks and to get rid of the plight of a vicious cycle. For commercial banks, the practice of sacrificing development for safety is not a long-term solution. Therefore, under the new form, how to improve the ability to prevent risks and seek higher profits in the steady development is a new task faced by every commercial bank.The research object of this thesis is JK Company in Bank of China Weihai Branch. This thesis analyses the risk management of JK Company order financing from four aspects: risk identification, risk quantification, countermeasures and risk monitoring. The risk of trade finance is an old topic. It can be seen from the domestic and foreign literature analysis that experts and scholars have many consensus on the risk management of trade finance. In practice, the commercial banks have mature financial instruments to avoid external risks such as political risks and exchange rate risks. Therefore, this article mainly focuses on internal risks of order financing. This thesis analyses the historical data, concludes the risk factors influencing the order financing from three stages in the process of risk identification: the pre-loan investigation, loan supervision and post-loan management and studies the ten indicators affecting order financing.In the process of quantitative risk analysis, this thesis conducts weight calculation through the methods of expert scoring and analytic hierarchy process, then analyses different risk indicators of orders using the VIKOR method to help commercial banks to choose the most optimal order.This thesis sums up advanced experiences of foreign banks about the risk control of trade financing, studies the situation of domestic commercial banks, and proposes three suggestions of the risk control of order financing of Bank of China Weihai Branch which are that the bank should perfect order financing risk management system from the angle of trade financing; the bank should strengthen the internal audit work from the point of view of the internal control management; the existing enterprise credit reporting system should be improved from the perspective of social supervision. In the respective of perfecting the risk management process of order financing, this thesis proposes that the commercial banks should improve pre-loan management, enhance loan supervision and strengthen post-loan management.