Main risks faced by microfinance companies:
1, expected annualized interest rate risk.
The floating range of the expected annualized interest rate of loans of microfinance companies is 0 ~4 times of the expected annualized interest rate of benchmark loans of the same grade in the same period announced by the People's Bank of China. The change of the expected annualized interest rate level of the People's Bank of China will affect the expected annualized interest rate and the expected annualized expected income of microfinance companies, and the fluctuation and change of the expected annualized interest rate will aggravate the expected annualized interest rate risk of microfinance companies. At the same time, with the acceleration of the marketization reform of annualized interest rate in China, it is expected that the marketization fluctuation of annualized interest rate will further affect its operating conditions in the future.
2. Credit risk
Small loan companies can only carry out business within the administrative region of the place of registration, and may not operate across administrative regions. This provision also makes the business of small loan companies concentrated in a certain administrative area. Once suffering from natural disasters, farmers' income will be reduced, and farmers are vulnerable groups, and their ability to bear risk losses is limited, which will weaken their repayment ability and bring operational risks to small loan companies.
In addition to the credit risk caused by farmers' business risks, microfinance companies are also facing the credit risk caused by farmers' moral hazard. Due to the low development level of rural productive forces and poor rural credit environment in China, some farmers have a weak credit concept, and the idea of defaulting on debts and evading debts is heavier, so moral hazard is hard to resist.
3. Operational risks
In terms of personnel composition, China's small loan companies are generally few and their professional skills are weak. Most employees of small loan companies have never engaged in financial business and lack business knowledge, which is very prone to operational risks. Moreover, many small loan companies have not set up special risk management posts and equipped corresponding personnel, and the operation of risk disposal business is only a literal provision.
4. Legal risks
China's microfinance companies are still in the exploratory stage, and the relevant laws and regulations are not perfect. The lack of such laws and regulations makes the identity of small loan companies unclear, which leads to certain legal risks.
The microfinance company is an enterprise legal person approved by the local government and registered in the administrative department for industry and commerce, and has not obtained a financial license. Judging from the services provided by microfinance companies, only providing loan services distinguishes them from commercial banks and does not apply to the commercial banking law.
Risk control and preventive measures of micro-credit
First, clarify the legal status of small loan companies and provide a good business environment.
Second, improve the credit legal system and enhance farmers' credit concept.
Third, improve the quality of personnel and improve internal control system.
Fourth, build a credit platform for farmers and establish an information sharing mechanism.
Fifth, establish a risk early warning mechanism to realize internal risk compensation.
Six, improve the rural credit mortgage, establish and improve the risk sharing compensation mechanism.