Study On Disposal Of Non-performing Assets In LW Rural Credit Cooperatives

LW Rural Credit Cooperatives(hereinafter referred to as "LW Cooperatives")has long suffered from its limitations in institutional mechanisms and low-level developments,which have given rise to the accumulated risk in its concepts,systems as well as assets.Especially in recent years,with the recession in the local iron and steel industry,agricultural products market,and the textile industry plus the bad credit environment,LW Cooperatives has been loaded with a substantial increase in its non-performing loans,deteriorating asset quality and continuously intensified operational risks.Rated as a 5B-Grade institution,LW Cooperatives has been listed as a key object of supervision by Shandong Banking Regulatory Bureau.Therefore,research on the non-performing assets of LW Cooperatives will help improve the liquidity,safety and profitability of assets in rural credit cooperatives,reduce business risks and promote the upgrading of the monitoring indicators to achieve its own sustainable and healthy development.This paper employs empirical research and data and text analysis method.We have taken 5050 cases from all the borrowers in LW Cooperatives as our samples and obtained much first-hand material after field surveys about the real operating conditions of these borrower companies,based on the author's many years of working experience in the disposal of non-performing assets and penetrating insights of the non-performing assets management status in the Cooperatives.This study applies the theory of non-performing assets disposal to the current non-performing assets management situation in LW Cooperatives.After an in-depth and detailed analysis,we have summarized the four major factors accounting for the non-performing assets in LW Cooperatives,namely,historical burden and government policy,persisting decline of the macreconomy,the bad credit conditions and backwardness in the management by LW Cooperatives.Based on the causes and current management situation of LW Cooperatives and taking into consideration the overall economic operations in the city of LW,we put forward an approach of disposing thenon-performing assets in diverse ways in the context of independent non-performing assets management.According to the characteristics of each non-performing asset,all the non-performing assets can be classified into different categories and disposed in one of the seven effective disposal methods offered in this paper,namely,direct recovery,legal clearance,loan restructuring,bankruptcy distribution,repaying debts with non-cash assets,marketization disposal,and writing off the dead loans.The problem of the non-performing assets in LW Cooperatives actually prevails in manyother rural credit cooperatives in our country.Therefore,the analysis and research on the non-performing assets disposal in LW Cooperatives can not only help promote the local asset management,but also provide a useful decision-making reference for other rural credit cooperatives and the financial regulatory authorities when they are faced with similar problems.