Keywords: rural commercial banks
The rural commercial bank's predecessor, the rural credit union, was created in the 1950s, and was then managed by the chamber of agriculture, the chamber of deputies and the association of local (city) associations. Since 2003, provincial associations have been established to directly manage the chamber of agriculture and commerce. It is because of the historical and policy factors affecting its management that, in the process of serving the local development of the rural economy, while its assets have grown rapidly and its credit portfolio has expanded, it has accumulated a large number of non-performing loans, which have seriously affected the further reform and development of agribusiness and even threatened its survival. An in-depth analysis of the causes of non-performing loans by agribusiness and practical measures to prevent and mitigate the risk of non-performing loans are key to ensuring their quality development。
I. Status of the development of non-performing loans by agribusiness
According to the guidelines for the classification of loans developed by the people's bank of china in may 1998, loans can be classified into five categories according to the level of risk: normal, care, secondary, suspicious, and loss. The latter three types are covered by non-performing loans, specifically, the borrower's failure to repay the bank's loan principal on time as contracted, or indications that the borrower is unable to repay the bank's loan principal in full and on time as contracted, even if the mortgage or guarantee is executed。
According to the public data published by the china bank for insurance and supervision, the balance of non-performing loans in the country's agribusiness banks was rmb 10,911 billion, rmb 18,622 billion, rmb 23,4. 9 billion, rmb 35. 6 billion and rmb 53,54. 4 billion, respectively, at a rate of 1. 87 per cent, 2. 48 per cent, 2. 49 per cent, 3. 16 per cent and 3. 96 per cent。
Analysis of the causes of non-performing loans by agribusiness
In recent years, the country has been undergoing a special period of "new normality" and "three overlaps" in its economic development, as well as ongoing supply-side structural reforms and "one by one " , with high macroeconomic downward pressure and slow real economic development. Non-performing loans by agribusiness began to climb in 2015, with a marked deterioration in the quality of credit assets. Essentially, the accumulation of large amounts of non-performing loans by agribusiness is due to its own and particular historical causes. The causes of non-performing loans by agribusiness should be based on an analysis of history and reality, exploring new approaches to local economic development, establishing new risk-prevention mechanisms and promoting the further reform and development of agribusiness in an orderly manner。
Generally, the causes of non-performing loans by agribusiness can be analysed in terms of both external and internal causes。
(i) external causes
Impact of national macroeconomic policies
The chamber of agriculture and commerce, which is the mainstay of our rural financial markets and the most specialized local financial institution, has an important role to play in the implementation of the national policy of supporting agriculture and promoting the economic prosperity of rural areas. In order to support rural economic development, reduce the gap between the rich and the poor in urban and rural areas, and respond to economic transformation and adjustment cycles, the state needs to invest large amounts of policy-oriented and pro-poor agricultural loans in rural areas through agricultural comptoirs, which have poor credit ratings, weak repayment capacity, low returns and slow turnover, and relatively high risks, making them vulnerable to non-performing loans。
