Research On Village Bank Credit Risk Control Mechanism In The Perspective Of Internal Control

Agriculture is the foundation of the national economy. In recent years, the country’s emphasis on "three rural problems" is gradually increasing. But the settlement of "three rural problems" cannot do without the support of the financial industry. However, the traditional financial organizations, like Rural Credit Cooperatives, haven’t played an active role in supporting the rural economy. With the gradual deepening of socialist new countryside construction and the development of agricultural industrialization and marketing, the contradiction between supply and demand for financial services in rural areas has become increasingly serious. In this context, village banks which provide specialized services in the rural economic development have come into being, and their number has exploded in recent years, by the end of2013, the number of village banks in our country has reached1071. The village bank, a new type of rural financial organization mode, has perfected the system of rural financial institutions. And it helps provide a new rural financial supply channel, eases the contradiction between supply and demand for rural financial services, enhances the competitiveness of rural financial market and activates the rural financial market. Credit risk control is an important work of banks, due to the special nature of operating regions and customers, there are significant differences between the credit risks exposed to village banks and general commercial banks. The study on credit risk control of village bank can help regulate the daily operation behavior of village banks and achieve steady development.Currently, there are very few researches to explore the motivation of credit risk control of the particular rural financial institution, village bank, from the angle of the internal control, and to discuss and refine its credit risk control mechanism. Therefore, this article chooses ShuLan JiYin village bank which has good achievements in credit risk control as a case, analyzes the motivation of its credit risk control from the angle of the internal control, and builds the village bank credit risk control mechanism.This paper uses the combined analysis methods of case study and root analysis to explore the village bank credit risk control mechanism. Firstly, this paper combs the existing related literature of internal control and village banks’credit risk control, reviews the development of internal control theory, elaborates the research state of the problems of the bank internal control and the corresponding measures, summarizes relevant research results about the concept, causes, recognition, measurement and corresponding solutions of bank credit risk control, and carrys out literature review on the basis of all these. Then, this paper explains the research method, case selection and data collection and analysis strategies of the research design. Later, this paper introduces the basic situation, market orientation, organizational structure, deposit and lending condition of ShuLan JiYin village bank. Then, this paper uses the method of root analysis on data open-coding to induce the initial category, proposes canonical model and summarize main category after the spindle-coding, concludes core category and puts forward the "story line". Later, this paper discusses village banks’credit risk control mechanism. At last, this paper puts forward the research conclusion, limitations and prospects.