= loan provision ratio/provision coverage ratio × 100%
The non-performing loan ratio of financial institutions is one of the important indicators to evaluate the security of credit assets of financial institutions. The higher the non-performing loan ratio, the greater the proportion of loans that may not be recovered in the total loans; The low rate of non-performing loans means that the proportion of loans that financial institutions can't recover is smaller.
A normal loan is defined as the borrower's ability to perform the contract, and there is no sufficient reason to suspect that the loan principal and interest cannot be repaid in full and on time. The definition of loan concern is that although the borrower has the ability to repay the principal and interest of the loan, there are some factors that may adversely affect the repayment.
Subprime loan is defined as the borrower's repayment ability has obvious problems, and it is impossible to repay the loan principal and interest in full by relying entirely on its normal operating income. Even if the guarantee is implemented, it may cause certain losses. The definition of suspicious loan is that the borrower can't repay the loan principal and interest in full, even if the guarantee is implemented, it will definitely cause great losses.
Loss loan refers to a loan whose principal and interest cannot be recovered or only a small part can be recovered after all possible measures or all necessary legal procedures are taken. After classifying all kinds of loans, the following three types of loans are classified as non-performing loans.
Various loans refer to the assets formed by banking financial institutions issuing monetary funds to borrowers. It mainly includes loans, trade financing, bill financing, financial leasing, buying resale assets from non-financial institutions, overdrafts and various advances.
Extended data
Harmfulness:
According to Japan's experience, China's economy is also dragged down by non-performing loans like Japan. More and more people have seen the harmfulness of non-performing assets.
1, the non-performing loan ratio is high, and the biggest harm is to affect the ability of banks to support the economy. Banks in China are extremely cautious about lending, because there are too many non-performing loans, which affect their lending ability.
2. If the problem of non-performing loans is solved by issuing base currency, it will easily lead to inflation. If we take it lightly, a large number of non-performing loans will also induce social moral hazard. If we strengthen the efforts to deal with non-performing loans, it may lead to chain bankruptcy of enterprises and increase financial risks and social crises.
Solution:
1. Strengthen the business supervision of financial enterprises, ensure the quality of each loan in the future, and prevent new non-performing loans.
2. Intensify the reform of China's enterprise system and strengthen enterprise management and competition mechanism.
3. Appropriately adopt an expansionary monetary policy, and give blood transfusion to some saved enterprises to bring them back to life.
4. Issue base currency to dilute non-performing loans.
The third and fourth methods are to increase the money supply and offset non-performing loans through moderate inflation, thus invigorating China's economy and increasing its vitality.
References:
Baidu encyclopedia-non-performing loan ratio
References:
Baidu encyclopedia-non-performing loans