Studies On Loan Insurance Usage In The Prevention Of Non-performing Loans In Small And Micro Enterprises

With the development of the economy, small and micro business is becoming an important part of our country’s economy. Some commercial banks are taking it as a focus for the increasing ratio of the economy and the development of small and micro loan business. However, bad loans from small and micro business are increasing, which brings a very high rate of non-payment along with the high cost of recovery. All these have decreased banks incentives of lending.How to remove the credit risk is the key to promote small and micro business loan business. This paper has introduced loan guarantee insurance as a tool to explain the solution design, proceed feasibility and risk surveillance in order to remove credit risk from small and micro loan business, to improve small and micro business’ asset quality, to ensure the loan business running in order.