Study On Credit Risk Management Of The Microfinance For Poverty Alleviation Based On The Block Chain

Microcredit is an important means to provide financial support to poor households and to promote poverty alleviation in poor areas.However,the special services target of microcredit makes it face serious credit risk.In the beginning,the microfinance business for poverty alleviation was developed in the form of government financial capital and subsidized loans.But,the government funding was not enough to make up for the risk loss of financial institutions with the development of microfinance for poverty alleviation.So,in order to guarantee the sustainable development of the financial institutions,the poverty alleviation microfinance in China embarked on the road of commercial development.Therefore,it is very important to strengthen the management of credit risk in poverty alleviation microfinance.This paper builds the anti-poverty microfinance block chain alliance system on the basis of the characteristics of block chain technology according to the particularity of the credit risk of the microfinance poverty alleviation.This system contains the government poverty alleviation mechanism,financial institutions for poverty alleviation and insurance institutions,strengthens the management of the credit risk of microfinance for poverty alleviation by determining the responsibility of the agencies positioning and clearing rules of the system operation.Some advantages of the block chain technology such as decentralization and to trust guarantee the safety of the system and date;some advantages,such as authentication mechanism and programmable intelligent contracts,make it enable to cope with the complexity of the real deal and improve the practical applicability of block chain.The article firstly analyzes the present development situation of the microfinance and the block chain technology,the unique advantages of the microfinance and its applications in the field of finance,uses the theory of asymmetric information and adverse selection to analyze the special credit risk which is faced by poverty alleviation microfinance institutions in China and the reasons,finds the root cause of credit risk happen through the mathematics method;Then,this paper explores the theoretical feasibility about using the block chain to manage the credit risk of anti-poverty microfinance,builds a poverty alleviation microfinance block chain alliance system model and designs its operation mode for this system to manage the credit risk;Finally,this paper puts forward policy suggestions to promote the management of credit risk for the microfinance for poverty alleviation in China.The results of the research show that the block chain system is an effective way for the anti-poverty microfinance to manage its credit risk.The block chain system can effectively reduce the cost of credit risk management of the microfinance for poverty alleviation,increase credit accessibility for the poor,reduces the degree of information asymmetry between the two and the occurrence of adverse selection;The full containing of the block chain system makes the poor default cost is extremely high,can effectively reduce the risk of default and promote the healthy development of the microfinance poverty alleviation.