Research On Credit Risk Management Of A Village Bank

In recent years,with the continuous adjustment of China's economic structure,the rural economy has broken through the economic mode dominated by traditional agriculture,and the financial awareness of small and micro enterprises and farmers has gradually strengthened,putting forward more and higher requirements for rural financial institutions.In 2006,China's first rural bank was established in Yilong,Sichuan province.As of March 2018,there are 1,672 Village Banks in China.The establishment of Village Banks has played an important role in alleviating the loan difficulties of small and micro businesses,improving the insufficient funds in rural finance and widening the financing channels of rural economies and accelerating the competition in rural financial market.Village Banks have gradually become a new force in the development of rural finance.However,due to the short establishment time,weak capital strength and the characteristics of the rural economy,debt business and assets business,which are mainly deposit and loan,remain the most important business of the rural Banks.In the process of the development of deposit and loan business of Village Banks,the weak credit awareness,imperfect credit system,frequent credit defaults and outstanding overall credit risks have become the main factors restricting the survival and development of Village Banks.Therefore,credit risk management is an important issue facing Village Banks.Founded in 2011,A Village bank is a bank with A foreign background in Lankao,Henan province.The scale of its loan business and deposit business shows an upward trend year by year,but the credit risk is especially prominent.In view of this,this paper takes A village bank as the research object,analyzes the problems of its credit risk management in villages and towns on the basis of domestic and foreign data,and puts forward countermeasures and Suggestions.This paper first summarizes the current situation of credit risk management of Village Banks from the three aspects of credit risk identification,risk control and risk transfer,and finds that the bank has problems such as lack of risk warning system,disorderly collection management and weak personnel risk awareness.Paper based on the theory of economics and finance,then analyzes the cause of the risk management problems,and discover its internal institutional factors are risk identification mechanism is not sound,risk management system implementation does not reach the designated position,the recruitment mechanism is imperfect and so on,the external environment factors of local market is weak,poor credit environment and the lack of good collateral,etc.In view of these problems,the paper puts forward Suggestions on perfecting credit rating system,perfecting warning mechanism,improving loan review mechanism,and improving external credit environment.It is of theoretical and practical significance to study the credit risk management of A village bank.In terms of theory,the existing research results of credit risk management focus more on the large commercial Banks in national or regional,confronted with the new financial main body of the village and town bank credit risk management is less,and village Banks credit risk has its uniqueness,the study of such financial institutions to complement the previous theory to a certain extent.From A practical perspective,on the one hand,specific Suggestions can be made for the credit risk management of village A Banks,so as to reduce the possibility of credit risk occurrence and promote the sustainable development of village Banks.On the other hand,this research can provide reference for other village and town Banks in credit risk management.