Studies On Loan’s Interest Rate Pricing Based On The Rural Small-medium Financial Institutions

In recent years, China’s rural economy has achieved great development, and rural landscape hasundergone significant changes. The development pace of corporations further accelerates andfarmers’ income continues to grow steadily. In this good development situation, the rural small-medium financial institutions, as the main force of rural finance, alone with the speeding up of theinterest rate marketization, have formulated the loan interest rate pricing method which counts onthe credit rating, guarantee forms, contribution index as its main factors, and implements thedifferentiation management, but the method has many disadvantages, for example, there areshort of scientific and specific standards of pricing，interest rate risk awareness is not strong, theinterest rate calculation lack of expertise, does not fully consider the customer relationship,market competition, etc., resulting that a loan does not match the benefits and risks and weakensthe competitiveness of loans,. Only if these problems are solved, rural small-medium financialinstitutions could adapt to the trend of the interest rate marketization.This article makes the contrastive studies on the domestic and foreign commercial bank, andon this basis s On this basis, combines with the characteristics of rural financial market and ruralfinancial institutions，an refers and applies the advanced modern bank lending rate pricing tools,and designed a more scientific and comprehensive lending rate pricing program. In this program,internal funds transfer pricing is selected to determine the cost of funds, operating time method todetermine the operating costs, the internal rating method to determine the cost of credit risk, thestandard method of personality to determine the operational risk cost, then combined with thebank strategy, and considering the customer relationship, market competition situation to adjustthe interest rate. By the new methods, the following conclusions had been drew at the end of thisarticle based on the case studies: First, it is important to evaluate the costs and benefits, theaccurate measurement of the cost of the loan can improve the price advantage, Second, it is alsonecessary in the scientific pricing strategy to comprehensively consider the bank strategy，marketcompetition, customer relations, target profit and so on, and then to ensure to exactly know theinformation of each loan’s interest rate in marketing the loans customers.