Discussion On Risk Control Of Asset Securitization Of Small Loans

The emergence of small loan companies has effectively alleviated the financing difficulties of small enterprises.However,small loan companies are also faced with problems such as difficulty in absorbing deposits and lack of financing channels,which restrict the further development of business operations.In this situation,asset securitization brings a new way of thinking to solve the financing problem for smallloan companies in the Internet consumer finance industry,so many small loan companies start to try to use the small loan asset securitization for financing.Many small loan companies make good use of asset stock,improve capital turnover and expand financing channels by carrying out asset securitization business.With the rapid growth of the issuance scale of small loan asset securitization,some potential risks are gradually exposed.Therefore,in the process of asset securitization,it is necessary to analyze each risk and formulate detailed and feasible control measures in order to better use this new financing method to raise funds.In 2013,Ant Small Loan provided first small loan asset securitization product in China--asset management--Alibaba No.1 Special Asset Management Plan.Later,it successively issued a series of products.In this paper,take small loan securitization products of Ant Small Loan Company as an Example,through the method of case analysis,on the basis of reading a lot of literature,combined with relevant theoretical study,the risk and the causes of risk,risk control measures were analyzed in the process,and the effect of control in the process is assessed.Related suggestions about financing risk control are provided for other small loan companies in the industry.This article research mainly consists of five parts: the first part is about introduction,lists of microfinance industry financing,asset securitization risk of microfinance industry recognition and cause,microfinance industry asset securitization risk control of the literature review.It also determines the research ideas and research methods of this article,so as to draw the basic framework of the thesis.The second part is an overview of the risk control theory of small loan asset securitization,introducing the related concepts,motivations,risk classification and characteristics,risk causes and risk control measures of small loan asset securitization.This paper holds that the risks of small loan securitization can be divided into original debtor credit risk,transaction structure risk,participating institution risk,interest rate risk and policy risk.The main causes of these risks are: the inappropriate operation of the asset pool,the multi-party transaction process and the change of market and policy factors.For the different risks caused in the process of small loan asset securitization,some risk control measures such as credit enhancement,bankruptcy isolation and circular transaction structure could be taken.The third part introduces the risk of securitization of credit assets and the causes of risk.First of all,the development of Ant Small Loan,business processes,and asset securitization motives are summarized,and then through the form of asset pool,the establishment of SPV,rating of assets and issuing securities and subsequent management to study he control measures adopted by Ant Small Loan.Then assets risks,important participant risks,the external environment risks form in the process of the securitization of small loan assets are analyzed.Finally,it is concluded that the main causes of the risk of the securitization of small loan assets are the poor quality of the assets,information asymmetry,changes of interest rate and policy.The fourth part analyzes the risk control measures adopted by Ant Small Loan in detail,and evaluates the effect of the risk control measures.The control measures adopted by Ant Small Loan for the risks related to the underlying assets include: establishing the whole-process control system and credit enhancement measures,transferring the returns and risks of the underlying assets,and establishing the circular transaction structure.The control measures adopted by Ant Small Loan for risks related to important participants are: setting the information disclosure institutions,opening the relevant data interface,and establishing the redemption mechanism of unqualified underlying assets.The control measures adopted by ant small loan for external risks include: offering higher yields than bonds of the same maturity,continuously tracking regulatory dynamics and policy requirements.The evaluation of the effect of risk control measures is mainly carried out from the perspective of the risk control effect related to the underlying assets,important participants and external risks.The fifth part is the research conclusion and enlightenment.While summing up the cases,it also puts forward suggestions on risk control measures such as credit enhancement measures,bankruptcy isolation mechanism,circular purchase transaction structure and other risk control measures for other companies in the industry that adopt small loan asset securitization to finance.