The Research On The Risk Management And Prevention Strategies Of The Private-owned Guarantee Companies

In recent years,influenced by the slow pace of the world economy,the downward pressure of the Chinese economy has become huge.In the second half year of 2015,great losses on stock markets in China caused the emergency of financial market chaos.The private guarantee company in Sichuan acted as an immature and new business,confronting complex and severe business environment.Due to the economic entities frustration,the investment intention for various trades,from retail and catering trade to car and real estate,became weaker,giving rise to the shrinkage of funds demand.Meanwhile,capital chains of some of the private guarantee companies have suffered from stagnation on stock market and estate.The effects doubled by these internal and external factors lead to enormous survival pressure of the private-owned guarantee companies.The ill-formed operation of the guarantee companies are everywhere in the proper cultural context of China.More stress on personal relations made the average rate of non-performing loans in China 20%higher than the world average level.Currently,the rate of non-performing loans of the guarantee companies has exceeded that of financial institutions,such as commercial banks and insurance companies.With the mass accumulation of non-performing guarantee business,the private-owned guarantee companies that are short of money with internal risks frequently occurring would be a victim of the cruel financial market and has already begun to split worse.With its number increasing on an annual basis,the private-owned guarantee companies have accounted for the half portion of the guarantee industry in the financial market.However,as a result of poor capital strength and bad credit of many private-owned guarantee companies,so commercial bank is rarely impossible to issue bank loans while it is hard to attract the small and medium-sized enterprises.In China's guarantee market,after the private-owned guarantee companies have provided private credit guarantee for the small and medium-sized enterprises,problems in guarantee auditing process,such as the risk and internal management problems would make guarantee companies sustain a great loss from the risk of third-party-obligation.Simultaneously,these companies also take on the transferred risk loss by commercial banks.At present,there are serious defects on its guarantee risk and management in laws and regulations of the private guarantee industry.The slow economic context in China and the complex changes in stock market are closely linked with performance of the private-owned guarantee companies.As for its different management and handing on the guarantee business process,the development of these companies would be tied up and the prospect would be looked bleak if there were no proper solutions or handing measures for risks.By mainly focusing on the management of guarantee risk and its related handing strategies,this paper puts forward methods system for risk management,which is beneficial to the concrete implementation of the private-owned guarantee companies and disperse its risk.This paper is comprised of six chapters:the first chapter is introduction.It mainly formulates the risk management background in financial macro environment,pointing out why researches are done on risk management and chooses the risk management of private companies as its research angle.The second chapter is about the related basic theories of the private-owned guarantee companies in guarantee market and literature review.The third chapter aims to analyze the development situation of the private-owned guarantee companies which are at its disadvantage standing with Information Asymmetry and to build a professional risk management framework capable of identification and monitoring.Starting from the characteristics of credit risk management of the private-owned guarantee companies,it establishes effective screening and risk information collective work,evaluates the guarantee business process and builds analytic framework for risk management.The forth chapter is about the evaluation and prevention strategies for risk management.Facing risks from various resources,it takes targeted measures and pays close attention to the soundness of the evaluation process of the risk management for guarantee companies.The fifth chapter gives the specific guarantee auditing process of Company A,studies the problems existing in risk controlling process of loan guaranty projects and build standard system for measuring the risk of the private guarantee business and standard risk management and standardization of process monitoring systems.The sixth chapter is summary and prospect.It proposes five conclusions and points out defects,the author hopes that other scholars improve themselves.