Survey on the operation status of rural credit cooperatives
The rural credit cooperatives are rooted in the countryside and serve the “three rural”, which is the main force of financial services in rural areas. The healthy development of rural credit cooperatives is directly related to the pace of rural industrial restructuring and to the increase in farmers' income, which is of great significance for building a well-off society in an all-round way. On February 10-24, 2003, the author conducted a special survey on county financial services in Xuchang City, Henan Province. Xuchang City is located in the Central Plains, with an agricultural population of 3.67 million. Agriculture is mainly based on planting and has a certain representativeness in traditional agricultural areas. The survey found that the current rural credit cooperatives have turned around; if they can properly handle some deep-seated contradictions, rural credit cooperatives will be able to embark on the fast track of sound development. First, the operation of rural credit cooperatives has turned around
Since 2000, under the guidance of the People's Bank of China, rural credit cooperatives have used microfinance as a breakthrough to change their business concepts, adjust their business ideas, tighten internal control systems, and strengthen risk prevention. Through the joint efforts of employees, their operations have finally come out of the trough. , showing the momentum of benign development.
Through the "one household, one license, one approval, use loan, balance control, turnover use" approach, vigorously promote small-scale farmers credit loans. By the end of December 2002, the city's rural credit cooperatives had issued 16,379 small-scale loan certificates for farmers, 49 credit villages, 1 credit town, 105,169 micro-credit loans, and a total of 24,381 million micro-credit loans. The balance increased by RMB 182.39 million compared with the beginning of the year. Through the "one-time approval, two-year effective, limited credit, balance control, and turnover use" approach, the "farm insurance loans for farmers" will be fully implemented. On a voluntary basis, 5 to 10 rural households or individual private households form a joint guarantee group to provide loan guarantees to each other, which greatly reduces the risk of credit union loans and promotes the placement of credit union loans. In 2002, the city has established 25,000 farmer joint insurance teams, accumulating 156,960 “small-scale farmer joint guarantee loans” and issuing loans totaling 108.33 million yuan. Vigorously carry out "one, three, two promotion" activities. In 2002, the city's rural credit cooperatives contacted 113,693 households, sending 265.63 million yuan for farmers and 84,569 messages, which were widely welcomed and enthusiastically supported by farmers.
The development of microfinance business has kept the loan business of rural credit cooperatives at a high speed. In the context of the withdrawal of state-owned commercial banks from the county economy, rural credit cooperatives played a leading role in the investment of agricultural credit. According to statistics, in the new loans to agriculture in Xuchang City in 2002, the proportion of rural credit cooperative loans accounted for 99%! The investment of rural credit cooperatives accelerated the pollution-free vegetables in Cangzhou Chinese Herbal Medicine Park and Yucheng County. The pace of construction of the “One Park and Nine Districts” such as the production demonstration zone has promoted the adjustment of the local industrial structure and increased the income of farmers. The amount of work for issuing small loans is relatively large, but the spreads are large and the risks are small. Turning the focus of work to the issuance of small loans has reduced the risk of new loans from rural credit cooperatives and improved the quality of loan assets. According to statistics, the rate of non-performing assets issued by rural credit cooperatives in Xuchang City is only 1%. Even if there is credit risk, after hard work, most of its principal and interest will be finally recovered, and the loan loss rate is very low. The shift in work priorities has also led to an increase in economic efficiency. In 1999, among the 96 credit cooperatives in the city, a total of 71 credit cooperatives suffered losses, with a cumulative loss of 90.29 million yuan; only 25 profitable credit cooperatives, with a total profit of 2.12 million yuan. However, by the end of 2002, 74 of the city's 100 credit unions had achieved profitability, with a total profit of 10.41 million yuan, an increase of 8.19 million yuan over 1999. The number of loss-making credit unions has dropped to 26, and the amount of losses has dropped to 26.15 million yuan, a decrease of 64.14 million yuan from 1999. It is estimated that in 2003, the number of profitable rural credit cooperatives in the whole jurisdiction will increase to 82, and the loss-making credit cooperatives will drop to 18. After the profit and loss rollover, the rural credit cooperatives under the jurisdiction will expect the loss to drop further to 6.5 million, a decrease of about 60% from the previous year.
Table 1 Changes in the economic benefits of rural credit cooperatives under the jurisdiction of Xuchang City
At the same time, with the continuous strengthening of supervision, the internal control system and risk prevention system of rural credit cooperatives have been continuously improved, and risk awareness and business awareness have been continuously strengthened. The original extensive management method that ignores economic accounting and neglects profit indicators. And the business philosophy has been initially reversed. It can be said that the current business activities of rural credit cooperatives have turned around.
Second, the deep contradiction that plagues the development of rural credit cooperatives
The turning point in the operation of rural credit cooperatives does not mean that its future development path is flat. At present, there are still a series of deep-seated contradictions that are plaguing the further development of rural credit cooperatives. These contradictions are mainly:
The ratio of non-performing loans is high and the burden of history is heavy. According to statistics, by the end of 2002, rural credit cooperatives under the jurisdiction of Xuchang City had a total non-performing loan of 19,063,000 yuan, accounting for 51.49% of the total loan balance. This ratio not only far exceeds the standards prevailing in the international banking sector, but is also much higher than that of state-owned commercial banks. The reasons for the non-performing loans of rural credit cooperatives are more complicated, mainly: when the agricultural banks are separated from the escrow relationship, the agricultural banks consciously pass on the risk loans; when the urban credit cooperatives and rural foundations are merged into the credit cooperatives, some non-performing assets are also Brought into the rural credit cooperatives; in the early 1990s, when the "project hot" and "development zone fever", the rural credit cooperatives were subject to local administrative intervention, and loans were issued in order to cooperate with the "big picture"; the enterprises maliciously fled and vacated credit cooperative loans; And poor management. Not only that, in order to curb inflation, the state has stipulated that the household savings deposits should be hedged, but the loan interest rate has not increased accordingly. As a result of the “national policy and financial institutions paying the bill”, the value-added subsidy has become a heavy burden for rural credit cooperatives. According to statistics, only the value-for-money savings will increase the interest expenses of rural credit cooperatives by 71.98 million yuan. Under the weight of non-performing assets and policy burdens, rural credit cooperatives have long been in a difficult situation of serious insolvency. Because of the lack of return on investment, farmers are reluctant to invest in rural credit cooperatives. In addition, local governments are limited by financial resources, and it is difficult to invest heavily. The capital of rural credit cooperatives cannot be supplemented. The corporate governance structure cannot be improved, and the scientific management system cannot be established. Real economic accounting is difficult to implement. . The ability of credit unions to sustain their development has been severely affected. Management lacks flexibility and self-employment is suppressed. For rural credit cooperatives, the People's Bank of China currently assumes the dual role of regulators and custodians. As a regulator, the People's Bank of China examines the qualifications of senior executives of rural credit cooperatives, urges them to establish internal control and risk control systems, check the compliance of their operations and the authenticity of accounting statements. As a custodian, the People's Bank of China also instructed rural credit cooperatives to conduct business. But these two functions are conflicting. In order to alleviate the pressure on supervision, the People's Bank of China has a tendency to curb the vitality of rural credit cooperatives. At present, the preparation of rural credit cooperatives and even the adjustment of service outlets require the approval of the People's Bank of China at various levels, which is time-consuming and laborious, which is not conducive to the timely adjustment of financial services by credit cooperatives according to the actual needs of economic and social development. As far as specific business is concerned, the production cycle of many characteristic agriculture is more than one year, but microfinance usually stipulates that the loan period is less than one year, and it is difficult to fully adapt to the needs of rural industrial restructuring.
The county's funds have been greatly drained, and the business environment needs to be further improved. The withdrawal of state-owned commercial banks has created good external conditions for the operation of rural credit cooperatives, but it also brought about a large outflow of funds. Due to the collection of scaled funds, the county-level branches of state-owned commercial banks have to deposit a large amount of idle funds, coupled with the absorption of postal savings, the formation of a large outflow of county economic funds. According to statistics, in the past five years, the average outflow of funds from the counties under Xuchang has increased by an average of 415.47 million yuan per year. In particular, since 1999, the outflow of funds has increased every year. The increments in 2001 and 2002 even reached a high level of 790 million yuan and 600 million yuan. Due to the massive outflow of funds, the development of rural credit cooperatives has to rely heavily on the support of policy loans. According to statistics, in 2002, nearly 60% of the agricultural loans invested by the rural credit cooperatives in the city were policy loans issued by superiors. Not only that, but there are also problems in the society that the concept of good faith is not strong, the credit system is not perfect, the enterprises are escaping debts and even the law is not strict. Some places even have the phenomenon of “winning the lawsuit but losing money”.
Table 2 Changes in the scale of capital outflows in Xuchang counties
The management level is low, and the quality of employees is difficult to adapt to the needs of business development. Due to the special nature of rural credit cooperatives, few graduates of formal universities are assigned to work in rural credit cooperatives during the economic period of planning. When it is possible to introduce the required talents through “two-way career choices”, rural credit cooperatives are difficult to recruit talents that are urgently needed for business development due to poor economic returns and low wages and benefits. This has formed a situation in which the quality of rural credit cooperatives is low. According to statistics, among the 24,549 formal employees of 6 credit unions and 100 legal entities in Xuchang City, there are only 22 employees with bachelor degree or above, and only 402 employees with college degrees. The lack of relevant professional knowledge and the weak economic strength directly restrict the adoption of modern technology by rural credit cooperatives. At present, most rural credit cooperatives are still operated by hand, which not only leads to inefficiency, but also makes it difficult to apply advanced management techniques and risk control methods, resulting in blind spots and potential loopholes in management.
The scale is small, the innovation ability is poor, and the service level is backward. Although the credit cooperatives jointly funded the establishment of the County Credit Union, and the credit unions exercised management functions for the credit unions, the rural credit cooperatives are the basic business accounting units and are independent corporate legal persons. At present, the business scope of rural credit cooperatives usually covers only one township. The quality of employees in too small jurisdictions and low standards determines that the credit unions and even credit unions have poor innovation capabilities and are difficult to adapt to the rapidly changing social and economic environment. Therefore, in the aspects of preventing financial risks, formulating internal management systems, determining operational procedures, introducing modern management techniques, and even strengthening mutual coordination and cooperation, credit cooperatives rely heavily on the help and promotion of external forces. At present, under the guidance of the People's Bank of China, the system of rural credit cooperatives to prevent and control credit risks has been initially established, but there is no corresponding integrated thinking on how to prevent risks from interest rate fluctuations. In addition, because the coverage of business outlets is too small, the foreign exchange business of rural credit cooperatives must be realized through layer-by-layer agents. A foreign exchange business, which is handled by a rural credit cooperative, usually takes three days, and the state-owned commercial bank can complete it within a few minutes or even a few minutes. The lack of smooth roads and the issuance of drafts have become a prominent factor restricting their service to the public.
Third, countermeasures
At present, along with the adjustment of financial organization structure and business strategy, rural credit cooperatives are facing a rare opportunity for development. However, only by solving the above-mentioned deep-seated contradictions, rural credit cooperatives can embark on the path of sound development, thus better serving the "three rural" and serving the members.
Clarify the commercialization development direction of rural credit cooperatives, and timely promote the shareholding system transformation of rural credit cooperatives. At present, we still position the rural credit cooperatives as “a rural cooperative financial institution that consists of members and shares, and implements democratic management of members, mainly providing financial services to members.” However, the actual situation is: from the perspective of capital composition, because rural credit cooperatives have a large number of non-performing assets, farmers and economic entities are not willing to invest in credit unions. The capital of rural credit cooperatives comes from government investment and employee stocks; from the perspective of supervision The application of rural credit cooperatives is also the regulatory standard for commercial banks; from the historical experience, an important reason for generating huge amounts of non-performing assets is that they have not followed the laws of market economy and neglected the extreme importance of economic accounting; from international experience, Financial sustainability is one of the important prerequisites for the success of microfinance institutions. The so-called financial sustainability means that the operating income of the microfinance institution has an appropriate surplus after making up for the operating costs. Therefore, the direction of commercialization of rural credit cooperatives should be clarified. After properly handling its historical burden, through the reform of the shareholding system, the rural credit union was reorganized into a commercial small financial institution, and the legal person qualifications of each credit cooperative were abolished, and the two-level legal person was a first-level legal person.
Take measures to lift the heavy historical burden of rural credit cooperatives. As mentioned earlier, the historical burden and non-performing assets of rural credit cooperatives are caused by various reasons. According to statistics, in Xuchang City, only the non-performing loans generated by “upper project fever” and “development zone fever”, urban credit cooperatives and foundation mergers, and ABC transfer were 1,168.31 million yuan, accounting for 88.36% of the non-performing loan balance. For the historical burden of state-owned banks due to policy and institutional reasons, the state has taken measures to divest. Under this circumstance, if the government adopts a disregarded attitude towards the policy and institutional non-performing assets of rural credit cooperatives and requires them to digest themselves, it will artificially form an external environment that is extremely unfair to rural credit cooperatives. Furthermore, it is not only a long time, but also the historical burden of the rural credit cooperatives, which is passed on to the peasants’ heads, by expanding the loan and loan spreads and diversifying the historical burden of the credit union’s profits. The policy of “take less, let go, live” is directly contrary.
Create a good external environment for the development of rural credit cooperatives. Appropriately relax the restrictions on the loan interest rate. The microfinance method is flexible and diverse, and the procedures are simple, but its transaction costs are relatively high, and the loan interest rate is raised.
Since 2000, under the guidance of the People's Bank of China, rural credit cooperatives have used microfinance as a breakthrough to change their business concepts, adjust their business ideas, tighten internal control systems, and strengthen risk prevention. Through the joint efforts of employees, their operations have finally come out of the trough. , showing the momentum of benign development.
Through the "one household, one license, one approval, use loan, balance control, turnover use" approach, vigorously promote small-scale farmers credit loans. By the end of December 2002, the city's rural credit cooperatives had issued 16,379 small-scale loan certificates for farmers, 49 credit villages, 1 credit town, 105,169 micro-credit loans, and a total of 24,381 million micro-credit loans. The balance increased by RMB 182.39 million compared with the beginning of the year. Through the "one-time approval, two-year effective, limited credit, balance control, and turnover use" approach, the "farm insurance loans for farmers" will be fully implemented. On a voluntary basis, 5 to 10 rural households or individual private households form a joint guarantee group to provide loan guarantees to each other, which greatly reduces the risk of credit union loans and promotes the placement of credit union loans. In 2002, the city has established 25,000 farmer joint insurance teams, accumulating 156,960 “small-scale farmer joint guarantee loans” and issuing loans totaling 108.33 million yuan. Vigorously carry out "one, three, two promotion" activities. In 2002, the city's rural credit cooperatives contacted 113,693 households, sending 265.63 million yuan for farmers and 84,569 messages, which were widely welcomed and enthusiastically supported by farmers.
The development of microfinance business has kept the loan business of rural credit cooperatives at a high speed. In the context of the withdrawal of state-owned commercial banks from the county economy, rural credit cooperatives played a leading role in the investment of agricultural credit. According to statistics, in the new loans to agriculture in Xuchang City in 2002, the proportion of rural credit cooperative loans accounted for 99%! The investment of rural credit cooperatives accelerated the pollution-free vegetables in Cangzhou Chinese Herbal Medicine Park and Yucheng County. The pace of construction of the “One Park and Nine Districts” such as the production demonstration zone has promoted the adjustment of the local industrial structure and increased the income of farmers. The amount of work for issuing small loans is relatively large, but the spreads are large and the risks are small. Turning the focus of work to the issuance of small loans has reduced the risk of new loans from rural credit cooperatives and improved the quality of loan assets. According to statistics, the rate of non-performing assets issued by rural credit cooperatives in Xuchang City is only 1%. Even if there is credit risk, after hard work, most of its principal and interest will be finally recovered, and the loan loss rate is very low. The shift in work priorities has also led to an increase in economic efficiency. In 1999, among the 96 credit cooperatives in the city, a total of 71 credit cooperatives suffered losses, with a cumulative loss of 90.29 million yuan; only 25 profitable credit cooperatives, with a total profit of 2.12 million yuan. However, by the end of 2002, 74 of the city's 100 credit unions had achieved profitability, with a total profit of 10.41 million yuan, an increase of 8.19 million yuan over 1999. The number of loss-making credit unions has dropped to 26, and the amount of losses has dropped to 26.15 million yuan, a decrease of 64.14 million yuan from 1999. It is estimated that in 2003, the number of profitable rural credit cooperatives in the whole jurisdiction will increase to 82, and the loss-making credit cooperatives will drop to 18. After the profit and loss rollover, the rural credit cooperatives under the jurisdiction will expect the loss to drop further to 6.5 million, a decrease of about 60% from the previous year.
Table 1 Changes in the economic benefits of rural credit cooperatives under the jurisdiction of Xuchang City
At the same time, with the continuous strengthening of supervision, the internal control system and risk prevention system of rural credit cooperatives have been continuously improved, and risk awareness and business awareness have been continuously strengthened. The original extensive management method that ignores economic accounting and neglects profit indicators. And the business philosophy has been initially reversed. It can be said that the current business activities of rural credit cooperatives have turned around.
Second, the deep contradiction that plagues the development of rural credit cooperatives
The turning point in the operation of rural credit cooperatives does not mean that its future development path is flat. At present, there are still a series of deep-seated contradictions that are plaguing the further development of rural credit cooperatives. These contradictions are mainly:
The ratio of non-performing loans is high and the burden of history is heavy. According to statistics, by the end of 2002, rural credit cooperatives under the jurisdiction of Xuchang City had a total non-performing loan of 19,063,000 yuan, accounting for 51.49% of the total loan balance. This ratio not only far exceeds the standards prevailing in the international banking sector, but is also much higher than that of state-owned commercial banks. The reasons for the non-performing loans of rural credit cooperatives are more complicated, mainly: when the agricultural banks are separated from the escrow relationship, the agricultural banks consciously pass on the risk loans; when the urban credit cooperatives and rural foundations are merged into the credit cooperatives, some non-performing assets are also Brought into the rural credit cooperatives; in the early 1990s, when the "project hot" and "development zone fever", the rural credit cooperatives were subject to local administrative intervention, and loans were issued in order to cooperate with the "big picture"; the enterprises maliciously fled and vacated credit cooperative loans; And poor management. Not only that, in order to curb inflation, the state has stipulated that the household savings deposits should be hedged, but the loan interest rate has not increased accordingly. As a result of the “national policy and financial institutions paying the bill”, the value-added subsidy has become a heavy burden for rural credit cooperatives. According to statistics, only the value-for-money savings will increase the interest expenses of rural credit cooperatives by 71.98 million yuan. Under the weight of non-performing assets and policy burdens, rural credit cooperatives have long been in a difficult situation of serious insolvency. Because of the lack of return on investment, farmers are reluctant to invest in rural credit cooperatives. In addition, local governments are limited by financial resources, and it is difficult to invest heavily. The capital of rural credit cooperatives cannot be supplemented. The corporate governance structure cannot be improved, and the scientific management system cannot be established. Real economic accounting is difficult to implement. . The ability of credit unions to sustain their development has been severely affected. Management lacks flexibility and self-employment is suppressed. For rural credit cooperatives, the People's Bank of China currently assumes the dual role of regulators and custodians. As a regulator, the People's Bank of China examines the qualifications of senior executives of rural credit cooperatives, urges them to establish internal control and risk control systems, check the compliance of their operations and the authenticity of accounting statements. As a custodian, the People's Bank of China also instructed rural credit cooperatives to conduct business. But these two functions are conflicting. In order to alleviate the pressure on supervision, the People's Bank of China has a tendency to curb the vitality of rural credit cooperatives. At present, the preparation of rural credit cooperatives and even the adjustment of service outlets require the approval of the People's Bank of China at various levels, which is time-consuming and laborious, which is not conducive to the timely adjustment of financial services by credit cooperatives according to the actual needs of economic and social development. As far as specific business is concerned, the production cycle of many characteristic agriculture is more than one year, but microfinance usually stipulates that the loan period is less than one year, and it is difficult to fully adapt to the needs of rural industrial restructuring.
The county's funds have been greatly drained, and the business environment needs to be further improved. The withdrawal of state-owned commercial banks has created good external conditions for the operation of rural credit cooperatives, but it also brought about a large outflow of funds. Due to the collection of scaled funds, the county-level branches of state-owned commercial banks have to deposit a large amount of idle funds, coupled with the absorption of postal savings, the formation of a large outflow of county economic funds. According to statistics, in the past five years, the average outflow of funds from the counties under Xuchang has increased by an average of 415.47 million yuan per year. In particular, since 1999, the outflow of funds has increased every year. The increments in 2001 and 2002 even reached a high level of 790 million yuan and 600 million yuan. Due to the massive outflow of funds, the development of rural credit cooperatives has to rely heavily on the support of policy loans. According to statistics, in 2002, nearly 60% of the agricultural loans invested by the rural credit cooperatives in the city were policy loans issued by superiors. Not only that, but there are also problems in the society that the concept of good faith is not strong, the credit system is not perfect, the enterprises are escaping debts and even the law is not strict. Some places even have the phenomenon of “winning the lawsuit but losing money”.
Table 2 Changes in the scale of capital outflows in Xuchang counties
The management level is low, and the quality of employees is difficult to adapt to the needs of business development. Due to the special nature of rural credit cooperatives, few graduates of formal universities are assigned to work in rural credit cooperatives during the economic period of planning. When it is possible to introduce the required talents through “two-way career choices”, rural credit cooperatives are difficult to recruit talents that are urgently needed for business development due to poor economic returns and low wages and benefits. This has formed a situation in which the quality of rural credit cooperatives is low. According to statistics, among the 24,549 formal employees of 6 credit unions and 100 legal entities in Xuchang City, there are only 22 employees with bachelor degree or above, and only 402 employees with college degrees. The lack of relevant professional knowledge and the weak economic strength directly restrict the adoption of modern technology by rural credit cooperatives. At present, most rural credit cooperatives are still operated by hand, which not only leads to inefficiency, but also makes it difficult to apply advanced management techniques and risk control methods, resulting in blind spots and potential loopholes in management.
The scale is small, the innovation ability is poor, and the service level is backward. Although the credit cooperatives jointly funded the establishment of the County Credit Union, and the credit unions exercised management functions for the credit unions, the rural credit cooperatives are the basic business accounting units and are independent corporate legal persons. At present, the business scope of rural credit cooperatives usually covers only one township. The quality of employees in too small jurisdictions and low standards determines that the credit unions and even credit unions have poor innovation capabilities and are difficult to adapt to the rapidly changing social and economic environment. Therefore, in the aspects of preventing financial risks, formulating internal management systems, determining operational procedures, introducing modern management techniques, and even strengthening mutual coordination and cooperation, credit cooperatives rely heavily on the help and promotion of external forces. At present, under the guidance of the People's Bank of China, the system of rural credit cooperatives to prevent and control credit risks has been initially established, but there is no corresponding integrated thinking on how to prevent risks from interest rate fluctuations. In addition, because the coverage of business outlets is too small, the foreign exchange business of rural credit cooperatives must be realized through layer-by-layer agents. A foreign exchange business, which is handled by a rural credit cooperative, usually takes three days, and the state-owned commercial bank can complete it within a few minutes or even a few minutes. The lack of smooth roads and the issuance of drafts have become a prominent factor restricting their service to the public.
Third, countermeasures
At present, along with the adjustment of financial organization structure and business strategy, rural credit cooperatives are facing a rare opportunity for development. However, only by solving the above-mentioned deep-seated contradictions, rural credit cooperatives can embark on the path of sound development, thus better serving the "three rural" and serving the members.
Clarify the commercialization development direction of rural credit cooperatives, and timely promote the shareholding system transformation of rural credit cooperatives. At present, we still position the rural credit cooperatives as “a rural cooperative financial institution that consists of members and shares, and implements democratic management of members, mainly providing financial services to members.” However, the actual situation is: from the perspective of capital composition, because rural credit cooperatives have a large number of non-performing assets, farmers and economic entities are not willing to invest in credit unions. The capital of rural credit cooperatives comes from government investment and employee stocks; from the perspective of supervision The application of rural credit cooperatives is also the regulatory standard for commercial banks; from the historical experience, an important reason for generating huge amounts of non-performing assets is that they have not followed the laws of market economy and neglected the extreme importance of economic accounting; from international experience, Financial sustainability is one of the important prerequisites for the success of microfinance institutions. The so-called financial sustainability means that the operating income of the microfinance institution has an appropriate surplus after making up for the operating costs. Therefore, the direction of commercialization of rural credit cooperatives should be clarified. After properly handling its historical burden, through the reform of the shareholding system, the rural credit union was reorganized into a commercial small financial institution, and the legal person qualifications of each credit cooperative were abolished, and the two-level legal person was a first-level legal person.
Take measures to lift the heavy historical burden of rural credit cooperatives. As mentioned earlier, the historical burden and non-performing assets of rural credit cooperatives are caused by various reasons. According to statistics, in Xuchang City, only the non-performing loans generated by “upper project fever” and “development zone fever”, urban credit cooperatives and foundation mergers, and ABC transfer were 1,168.31 million yuan, accounting for 88.36% of the non-performing loan balance. For the historical burden of state-owned banks due to policy and institutional reasons, the state has taken measures to divest. Under this circumstance, if the government adopts a disregarded attitude towards the policy and institutional non-performing assets of rural credit cooperatives and requires them to digest themselves, it will artificially form an external environment that is extremely unfair to rural credit cooperatives. Furthermore, it is not only a long time, but also the historical burden of the rural credit cooperatives, which is passed on to the peasants’ heads, by expanding the loan and loan spreads and diversifying the historical burden of the credit union’s profits. The policy of “take less, let go, live” is directly contrary.
Create a good external environment for the development of rural credit cooperatives. Appropriately relax the restrictions on the loan interest rate. The microfinance method is flexible and diverse, and the procedures are simple, but its transaction costs are relatively high, and the loan interest rate is raised.
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