Research On Small Loans Risk Management To Commercial Banks

Small loans mean to provide small amounts of credit services for the dispersion oflow-income groups, individuals and small micro enterprises, on the condition of customersdon’t need to provide collaterals. Because small loans risk is significant and the cost is high，there is no power for commercial banks to develop small loans business actively， smallloans business is backward. Some controversies exist on “whether or not to develop smallloans” and “how to develop small loans”. This article demonstrates the necessity andfeasibility of developing small loans to commercial banks firstly, answering the first question.And then on this problem of “how to develop small loans”, this article argues that the obviousrisks are the most important factor of small loans to commercial banks. Therefore we need tofind a way to focus on solving risk management of small loans to commercial banks, which isthe theme and core of this article.Through analysis we find three defects about the risk management of the small loans tocommercial banks: the credit rating system which is the basis of the review should beimproved; the ability of data analysis which supports small loans risk decision-making is notstrong; post-loan risk management is weak. So we need innovate the risk managementmechanism of small loans in commercial banks to solve the three aspects of defects. In orderto improve the level of risk management of small loans and develop small loans sustainablyand healthy, this article puts forwards some countermeasures include: consummating thecredit rating system of small loans; developing the third party rating market actively,extending the information sources of the credit investigation system; improving the ability ofdata mining and analysis; building reasonable and closed funds loops.At the end, the case of ali small loans risk management demonstrates the view of thisarticle. Said the advantages of ali small loans on the risk management mechanism, relativelymature credit evaluation system and a complete transaction database, a strong ability of dataanalysis and data to support decision making, unique sealing process and appropriatecollateral are that it can stand out in the fierce competition in the small loans market.