Forest Right Mortgage Risk Research In Zhejiang

Reform of southern collective forest right system makes the forest certification of farmers’legitimate documents. Forest right mortgage loan business solves the financing problems offorestry effectively, which inspires farmers engaged in forestry production and benefited from itgreatly. So the business is of significant importance in guaranteeing the sustainable developmentof forestry. Based on the review of related literature, I took in-depth investigation, collectedsecondary data, interviewed with key participants, and analyzed risk of forest right mortgageloan in Zhejiang province, the main conclusions and suggestions are as follows:(1) Under the background of forest tenure reform, forest right mortgage loan in Zhejiangprovince is developing rapidly, the scale of business grows increasingly. The direct forest rightmortgage, foresters revolving loan and the forest right mortgage loan are the three modes.(2) Zhejiang Province Rural Credit Union has a largest scale of this business, with atendency of non-performing loan ratio increasing yearly, but far less than the ratio of commercialbanks in the same period around China and Zhejiang Province. Lishui City, Quzhou city andHangzhou city list at the3top level cities of forest right mortgage loan business, showing thatthe forest right mortgage loan risk is not high with non-performing loans rate below0.35%.(3) Risk of forest right mortgage loan is mainly from the four aspects of collateral,borrowers, financial institutions and macroeconomic environment. Typical forest right mortgageloan default case analysis shows that, Zhejiang province forest right mortgage loan credit riskcomes mainly from three aspects: the first is risk of value assessment, management and collateraldisposal, the second is the borrower’s credit risk, and the third is financial institutions’inexperience in forest right mortgage loan.(4) Based on above conclusion, policy suggestions are put forward as follows: improvingmechanism of forest right evaluation to reduce the collateral valuation risk; perfecting the forestright trade market to reduce the collateral disposal risk; improving the rural credit system tocontrol the risk of the borrower; strengthening the internal management of financial institutionsto guard against the risk; establishing cooperative risk prevention and compensation mechanism.