Risk Management Analysis Of Loan Financing Guarantee Project

In recent years,the overall environment of China,which promotes national entrepreneurship and the growth of private businesses through a variety of measures,has created new development chances for guarantee companies.However,economic downturn and recession in macro economy result in a drop in small and medium-sized companies’ earning capacity and a distinctive increase in guarantee company’s compensation capacity of loan guarantee.Data show that in 2019,the compensation rate of Chinas guarantee industry exceeded 2%,resulting in a sharp decline in the provision coverage of guarantee liability.As Chinas economy adjusts to the new normal,micro,small and medium-sized enterprises face increased difficulty and decreased profitability.The new normal imposes more stringent operational management requirements on business owners and more stringent risk management requirements on guarantee organizations.Therefore,guarantee companies must adapt to the new normal,strengthen risk management,reduce the repayment rate,and achieve the goal of maintaining the stability of the companys capital chain and the companys sustainable operation in order to more effectively address the issue of financing difficulties for SMEs.Guarantee businesses must now focus on how to conduct more effective risk management of loan guarantees in light of this development.In view of this,this thesis employs a case study methodology to perform an in-depth investigation of SR Guarantee Companys TX and ZX guarantee finance substitute projects.By classifying SR Guarantee Companys profits and losses in business operations,financial data analysis,and counter-guarantee methods,this study provides a more thorough analysis of the risks associated with SR Guarantee Companys guarantee projects.Meanwhile,it investigates the reasons of the case companys project risks and makes countermeasures as well as recommendations to increase the guarantee projects risk control and management level.The following conclusions are drawn from this thesis:(1)The guarantee companys system design should be enhanced to enable due diligence professionals and reviewers to do their duties effectively.Simultaneously,project investigation and risk control review should be informal.(2)guarantee companies should strengthen communication with government departments and banking departments,communicate with one another for risky projects,and mitigate government departments and banking departments influence on guarantee projects.(3)guarantee companies should take into account the regional industrial structure when designing products,and design guarantee policies reasonably.(3)In the design of the products,guarantee company should fully consider regional industrial structure and design guarantee product rationally,in order to avoid that guarantee industry is too centralized in certain industry and cause potential industry compensation risk.