Research On The PPP Project Loan Risks Measurement And Prevention Of Commercial Banks

The creative innovation of the industrial revolution and the technological revolution has led to the rapid development of urbanization around the world,which is accompanied by the increasing financial pressure of governments in public utilities,making the traditional government financing mode unsustainable.Public Private Partnerships is gradually adopted by various countries and widely used in Public services and infrastructure construction due to its advantages of financing.Financial institutions such as Banks,securities companies,insurance companies and fund companies are the main capital suppliers of PPP project financing and play an important role in PPP projects.In China's PPP projects,commercial Banks take the leading position in providing financing services for PPP projects in the form of project loans.Since 2014,when the state council first explicitly proposed the "promotion and use of the cooperation mode between government and social capital",PPP mode has been rising rapidly in China.However,due to the long cycle of PPP projects,uncertain future returns and other inherent risk factors,commercial Banks have many concerns about the credit granting of PPP projects,which has affected the construction pace of China's public utilities.At present,China is in a critical period of new-type urbanization development.It is particularly important for the commercial Banks to know how to identify and prevent risks of project loans,so that they can lending for it without hesitant.Taking metro line 2 PPP project loan of Y Bank in H city as an example,based on the financial theory,taking value for money,analytic structure model,analytic hierarchy process,financial indicator and sensitivity analysis into use,in order to measure project loan risk of commercial banks from different angles,different levels,based on the results,we will take further analysis to sum up the risk prevention measures of Y bank.By induction,from the perspective of financial and non-financial to sum up several risk prevention measures on project loans,namely the financial early warning systems of borrowers,perfection of the project loan risk management mechanism and risk prevention from the Angle of the benefits and the future market which guarantee reimbursement funds,so as to reduce the risk of bad loans.According to the above ideas,this paper aims to explore the risk prevention strategies for commercial Banks on PPP project loan,and provide some beneficial discussions.