A loan company refers to a banking non-deposit financial institution established in rural areas by domestic commercial banks or rural cooperative banks with the approval of China Banking Regulatory Commission according to relevant laws and regulations, which provides loan services for county farmers, agriculture and rural economic development. The loan company is a limited liability company fully funded by domestic commercial banks or rural cooperative banks.
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The advantages of loan assistance companies are as follows:
1, the marketing cost of bank microfinance is high, and it is difficult for small enterprises to apply for loans directly from banks, which leads to the fact that small enterprises can only seek help from financing institutions such as loan guarantee institutions when they have financing needs. The cost for loan guarantee institutions to select customers is relatively low, so selecting high-quality projects from them and recommending them to cooperative banks will improve the success rate of financing, thus reducing the marketing cost of bank microfinance.
2. In terms of risk control of loans, banks are reluctant to invest in small loans. One of the important reasons is that the management cost of such loans is high, but the income is not obvious. For this kind of loans, loan guarantee institutions can optimize the management process, form personalized service for post-loan management, share the management cost of banks, and eliminate the worries of banks.
3. After the risk is released, the advantages of loan guarantee institutions are irreplaceable. The project of bank direct loan is risky, and the disposal of collateral often takes a long time, with high litigation cost and poor liquidity. The cash compensation of guarantee institutions has greatly solved the disposal problem of banks. Some loan guarantee institutions can compensate in 1 month, and the bank's non-performing loans will be eliminated in time, and then the loan guarantee institutions will resolve the risks through their more flexible handling methods than banks.
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