Research On Risk Management Of Immovable Property Financing Leasing Business

Recent years has witnessed the rapid development of the financial leasing industry in China and a continuous increase in the number of various financial leasing companies.The business scope has gradually evolved into a complex domain integrating engineering machinery,printing,medical facilities,shipping,aviation,and automobiles from an initially singular domain of engineering machinery.The rapid development of the financial leasing industry is accompanied by increasingly fiercer competitions.Therefore,it should be treated as an urgent task for financial leasing companies to look for new financial leasing domains and business operation modes in the near future.With China unveiling a range of relevant policies on encouraging financial leasing companies to participate in infrastructure constructions,such as urban-rural public utilities,sewage treatments and garbage disposals,environmental governance,broadcasting,communications,as well as irrigation and water conservancy,the immovable property financial leasing business has become one of the new development directions explored by financial leasing companies.Any financial innovation is inevitably accompanied by risks.Due to the particularity of immovable property,there are differences between its risk points & risk evaluation system and those applied in financial leasing businesses on movable property.Since any of the related schools of theory has not yet established a series of mature risk management theoretical systems on immovable property financial leasing businesses,financial leasing companies often have no knowledge of risk evaluations and management when operating their respective immovable property financial leasing businesses.Therefore,it is necessary to formulate a set of methods on the risk management for immovable property financial leasing.Based on an analysis of risks existing in the immovable property financial leasing businesses,this paper attempts to build a series of risk evaluation systems targeting the said risks and with the aim of providing a certain amount of references for financial leasing companies to consult with while running their immovable property financial leasing businesses.This research is mainly conducted through the literature review method,the comparative analysis method,and the case analysis method.Considering the limited number of references and the insufficient amount of research materials published by the relevant schools of theory on immovable property financial leasing businesses,on the basis of the existing traditional risk management theory on movable property financial leasing businesses,the author adds his/her interpretation on the risks of treating immovable properties as leasehold properties to build a risk evaluation system for immovable property financial leasing and puts forward some risk management suggestions for the financial leasing companies to refer to during their respective immovable property financial leasing ventures.First of all,the author consults relevant literature materials on immovable property financial leasing risk management and summarizes the research findings on the existing immovable property financial leasing risk management.The author also introduces the definitions and features of the immovable property financial leasing,the status quo of the immovable property financial leasing industry,as well as the risks and causes of immovable property financial leasing businesses.Secondly,credit risks and leasehold property risks are selected as the research objects on the principle of operability,independence,and science,before establishing an indicator system and an indicator judgment criterion for immovable property financial leasing risk evaluations by virtue of the analytic hierarchy process.Thirdly,this paper introduces two actual immovable property financial leasing cases of J Financial Leasing Company and applies the risk evaluation mode to both cases.Finally,from the dimensional perspectives of credit risks and immovable leasehold property risks,a number of risk management suggestions on immovable property financial leasing are proposed,such as enhancing substantial guarantee measures,actively accessing the credit reporting system,strengthening value confirmations of leasehold properties,and ensuring the integrity of the ownership of leasehold properties.With the research direction of immovable property financial leasing seemingly becoming a viable option for the financial leasing industry to explore,the focus on immovable property financial leasing risks and the related risk management studies will certainly be continued.With the relatively minute capacity of the author as an independent researcher,it is hoped that there could be more people participating in the research on immovable property financial leasing risk management.This paper shall be considered as an insignificant and superficial reference.