Research On Risk Control Of Small Loans For Farmers

At present,there is a big gap in China’s rural areas in terms of financial support.As the focus of "three agriculture" of state-owned banks,Agricultural Bank of China has been increasing the annual payment of agricultural loans year by year,small loans to farmers become the effective financial products to solve the rural financial resources shortage.However,with the deepening of economic development,rural area’s financial resources shortage problem is still growing,the main source of the problem is that farmers generally lack adequate collateral,Thus,the business risk of agro-loan is difficult to control.Nowadays there are many researches on agricultural loans of commercial Banks in our country,but there are few researches on the risk management of small loans for farmers specialized in the county level,especially in actual cases.Whether the existing risk management measures can effectively help agricultural bank A branch to control the risk of small loans to farmers,whether the county agricultural bank can establish standard risk management standards,and whether the current risk management measures can adapt to the changing needs of farmers,these are the research objectives of this paper.This paper will take the agricultural bank A branch as the research object.It adopts the research methods of field investigation method,case analysis method and CAMEL evaluation method,and chooses the investigation and research on the business development and risk management status of farmers’ small loans in agricultural bank A branch.Through the analysis of the financial data of A branch in recent years,the field visits the situation of the small loan business of rural households,it is believed that there are some problems in the bank risk management of the small loans of farmers,mainly including credit risk management,operation risk management and market risk management.The risk problem is mainly due to lack of mortgage collateral for farmers,high cost of loan management,weak management ability of farmers,poor management conditions of rural loans,homogeneity of small loan products of peasant households,lack of financial products such as agricultural insurance,and regional risks caused by government policies.From the perspective of CAMEL analysis,agricultural bank A branch has abundant capital and good asset liquidity,but the management quality of the assets has been seriously declined because of the development of the small loan business of farmers.After paying high management costs,the effectiveness of the risk control of small loans to farmers is still unsatisfactory,which has a serious impact on the profitability of agricultural bank A branch.According to the actual reality,combined with corresponding theoretical knowledge,this paper proposes corresponding countermeasures and Suggestions,which mainly include : improving the cooperation mechanism between Banks,introducing external risk management agencies,improving the operation and management ability of farmers,regulating the operation of loan business,establishing standard operation consciousness,establishing differential credit system,encouraging agricultural insurance business,maintaining long-term improvement of risk management ability,actively avoiding loan concentration,timely communication with the government,and increasing the guidance of farmers.In this paper,the research object is the Agricultural Bank of Jiangxi prefecture level city,The management level and risk content of agricultural bank of China are in the current development of China,and the problems exposed in the small loan business of peasant households are also more typical and representative.The research on risk management of Agricultural Bank A branch has a guiding significance to the reality of the existence of the business risks,and can provide reference for the actual case study of risk management of the whole small loans to farmers in China.The effective and reasonable risk management measures taken by agricultural bank A branch in the small loan business of peasant households can also be used for reference by other financial institutions.