Due Diligence Report Of Muma Village Reconstruction Project Loan

The subprime crisis that originated in the U.S. makes the other serious recession since the great depression. China pushed the4trillion investments in case of the recession. The big investment supported the GDP growth rate, and the Real Estate played as strongest pillar of GDP. The side effect of high growth was house price, which the central government had to deal with.Since the eighteenth congress, the fifth generation leader implemented the crunch monetary policy, especially in the real estate industry. To optimize the structure of economy, the shanty areas reconstruction was recognized by the central government, as the new engine which would drive China’s growth. As a large state-owned bank, ICBC designed the shanty area reconstruction loan as part of macro policy to optimize the resource allocation.The current related studies have shown that there are obvious system advantages when government plays a dominant role in the project. Most of researches focus on policy suggestion, instead of project research. Researching as a client manager who serves in bank should be valuable. As a banker, the profitability will be the first standard to evaluate the project. In particularly, the cash flow estimating is the core of the whole project evaluating. Depending on the feasible reports, client manager will evaluate its profitability, client, project and so on, for making decision. Debt paying ability was the most important. It should be evaluate from different perspectives, such as project cost, cash gathering, interest and so on. The hypothesis should be confirmed by history data, market value, and available project method and so on. After all, the sensitive test and scenario test should be implemented to evaluate risk, the more the better.In the recession, Banks pay more attention to risk control, so reliable detailed due diligence plays an important role. Above all, more research about due diligence is needed urgently.