Research On Loan Risk Management Of Small Loan In Yongyuan Company

Since PBOC launched the pilot projects of microfinance,with the reform of China’s financial system,the development of economy,and the legalization of private finance,microfinance companies sprung up and entered into a high-speed development era.Microfinance companies helped to a certain extent in replacing irregular private lenders and alleviating the pressures of financing for small and medium sized companies.It is just under such background that Yongyuan Microfinance Company(hereafter refered to as Yongyuan Company)was incorporated.However,with the development of the microfinance industry and the change of the government policies and social economic environment,a lot of microfinance companies,including Yongyuan Company,were facing increasingly huge credit risks and suffered loan losses for their own mismanagement of credit risk.That has severely threatened the development and survival of the microfinance companies.Credit risk management has become a key topic and the core competence for microfinance companies.So it has very important research significance.Based on the above research background,the author took Yongyuan Company as an example,studying Yongyuan’s daily operation and credit risk management,to analyze the credit risk management.Firstly,we introduce Yongyuan’s general situation,staff structure,loan portfolio,and loan quality.On this basis,the author reviewed the company’s credit risk management structure,basic policies and implementation,to analyze the problems of the company’s credit risk management and the reasons underneath.Secondly,pursuant to the analysis results,the author tried to propose suggestions to improve the company’s credit risk management,including strengthening risk identification method of small loan,creating credit risk assessment model of small loan,establishing the mechanism of small loan early warning and risk control,increasing customers’ cost of delinquency of small loan,and reinforcing post-loan management of small loan.Thirdly,the author also introduced in this paper some supporting measures to ensure the improvement scheme can be conducted smoothly and make it more practical.Finally,based on the above studies,the author made a conclusion on the research and discussed its future application.With the research of this paper,it improves Yongyuan’s credit risk management;help them to survive in the intensive market competition,and provide them with ways of sustainable development.Besides,in view of the fact that China’s microfinance industry is still in its early development stage,and there is no a systematic credit risk management standard,the author hopes that this paper can have some helpful implications for other microfinance companies which are facing similar challenges,so as to increase the credit risk management and to better fill in the blank of the financing for small and medium sized companies,and finally to facilitate the development of China’s inclusive financial system.