Study On The Microfinance Risk Management System For LJRCB

In recent years, microfinance has been quickly developed in Lj Rural commercial bank (abbreviated LJRCB), and the proportion of microfinance has been reached to80%. With the continuous development of this business, the risks and the loss resulted by it have been daily accumulated. According to the statistics of this bank, the total bad loans of microfinance has been taken up more than90%in the total bad loans of this bank. Hence, it is the serious question for this bank to defend and manage the microfinance risks. So, this paper puts forward this subject to research and tries to build specific microfinance risk management system to control and avoid the risk.The paper has firstly defined what microfinance is and then researched the characteristics which the microfinance has. After having analyzed and reviewed the research status home and abroad about the methods of microfinance risk management, the dissertation chosen the way that would use to research the microfinance risk management for LJRCB. On the base of these, the dissertation studied and analyzed the status quo of LJRCB’s risk management for microfinance, and then defined and identified the microfinance risks and analyzed the reason why the risks appeared. Then the paper made a model to estimate the risk after having chosen many indexes about the microfinance risks. This work has given a base to manage microfinance risks. At last, the paper puts forward a suggestion to make a special department to manage and control the microfinance risk. This department is called microfinance risk managing and controlling department (MRMCD). On the basis of all the work above, the paper put forward some suggestions about improving internal organization structure, improving the management system for LJRCB to manage and control the microfinance risk. In the end, the dissertation makes an empirical research in LJRCB. By analyzing and researching the data obtained from the test, the paper put forward some suggestions to expand the microfinance business and to avoid risks for LJRCB.The maybe innovating points for this dissertation are:First, it has built a microfinance risk estimating model through classically analyzing the risks. Second, it has put forward a suggestion to build a special department managing and controlling the microfinance risks. Third, it has also put forward some suggestions to expand the microfinance and to avoid microfinance risk for LJRCB. And so on.