The Risk Management Of Forest Right Mortgage Loan

Currently, forestry financing problems seriously hampered the sustainable development offorestry. Forest right mortgage loan effectively solve the problem of shortage of funds inforestry development, and promote the development of modern forestry economy. However,the Forest right mortgage loan has some unique risks arising from forestry operation features.Therefore, the study of risk management about Forest right mortgage loan is of greatsignificance both in theory and practice.In this paper, it take the risk management about Forest right mortgage loan in B RuralCredit Cooperatives of A Provincial for example, in order to study the risk management aboutForest right mortgage loan. Firstly, it introduced the overall risk and the management statusabout Forest right mortgage loan in A provincial and in the rural cooperative financialinstitutions of A provincial. And then it focus on the risk and the management situation aboutForest right mortgage loan in B RCCs and deeply analyzes the fraud occurring in B RCCs andrisk management measures which B RCCs has taken. Lastly, I proposed some suggestions tofurther improve the risk management about Forest right mortgage loan on the basis of caseanalysis. This paper argues that the Forest right mortgage loan has four characters: collateralhas high risk, borrowers has high borrowing costs, information asymmetries and creditsupport mechanisms seriously unsound. The main risk of Forest right mortgage loan is creditrisk, market risk and operational risk. Existing risk management measures have some existingproblems in the respect of risk avoidance, risk transfer and risk suppression. Therefore, tofurther strengthen the risk management of the Forest right mortgage loan, firstly to build riskprevention mechanism which is suit for Forest right mortgage loan characteristics, andsecondly, to establish a comprehensive risk transfer mechanism about Forest right mortgageloan.