Risk Management Of Agricultural Micro-credit Projects

At present,China is in a critical period of transition from traditional agriculture to modern agriculture.On the basis of the guidance of macroeconomic policies and the introduction of various promotion measures,more new agricultural management entities will emerge to apply various advanced technologies to improve agricultural production,and to promote more efficient agricultural equipment applications.In the future,the agricultural industry will become one of the most important pillar industries for China's economic take-off and it has a huge room for growth.However,due to various reasons,there is a considerable contradiction between the current agricultural financial supply and demand.First of all,the existing financial services cannot meet the financial needs of agricultural producers due to limitation in service scope and lack in allocable resource.Secondly,financial institutions are facing severe information asymmetry in the process of providing financial services,due to the hardships in collection rural financial service receiver's information.Thirdly,because of the information asymmetry,policy supported agricultural financial service projects provided by traditional financial institutions are stuck in a position where service providing is discontinued due to business bankruptcies.Therefore,as an important means to support agricultural development,agricultural microfinance needs to be quickly updated and iterated,adapt to the development of the industry as soon as possible,improve service level and ability,study how to actively use Internet technology to solve information asymmetry,analyze agriculture from the perspective of real business scene and business chain,identify the scene participants,and select mature and reliable microfinance technology to conduct customer access and continuous risk management according to the customer's portrait,and effectively promote the agricultural financing's coverage scope,stability and sustainability.This paper refers to the project risk management theory and Basel Agreement's related requirements,and brings up “business continuance” as core principal of the agricultural microcredit project,in the process of analyzing the business mode of agricultural microfinance projects.Based on the analysis of agricultural production scenarios,this paper selects the representative trading scene of pesticides and fertilizers in the consumption area as the entry point,analyses the business modes of all participating main bodies,using widely existing sell-on-credit behaviors in the transactions as a breakthrough,makes clear that sell-on-credit behavior is a spontaneous agricultural finance due to the two trading parties' long term transactions,higher trading frequency and lower information asymmetry and looks for opportunities where micro-credit can replace sell-on-credit.Through the analysis and interpretation of existing mature microfinance technology theories and specific practical cases,we can find credit technology suitable for the selected scenarios.Through the mature Internet data management system,collect customer business information,subject information and third-party information,establish a customer identification and access model,provide micro-credit to distributors of pesticides and fertilizers,and purchase directly in the channel network in the long-term.Farmers of agricultural resources provide loans for benefiting farmers.The model can also be expanded on the Internet platform to financing entity credit rankings,reduce the cost of obtaining customers and approvals,early warning of operational risk,dynamic adjustment of credit lines,and realize the informationization,automation and specialization of agricultural microfinance.The research and application of this model will provide a practical and feasible financial solution that can be widely replicated on the Internet to alleviate the “financing difficulties” and “high-cost” of the three rural issues provide financial support for the development of agricultural industry,and support the new agricultural management entity.It will promote the application of advanced production technologies and contribute to the rural revitalization strategy.