What Are the Different Types of Community Development Loans?

The concept of community bank comes from the western developed countries such as the United States. The community in it is not a strictly defined geographical concept. Settlements.

Community bank

The concept of community bank comes from the western developed countries such as the United States. The community in it is not a strictly defined geographical concept. Settlements.

Local small commercial banks with small assets and serving mainly small and medium-sized enterprises and households in the business area can be called community banks. ^[1]

The growing call for community bank development has also become

At present, the development of "community banks" is of great significance, and is a necessary choice to promote the coordinated development of economic finance and communities.

First, this is a necessary measure to improve the structure of the banking system.

The banking system must emphasize the rationality of its structure. Not only should it be "diversified," but the large, medium, and small proportions must be appropriate. At present, the weakest link in China's current banking system is small commercial banks, whose proportion is too low, while the proportion of large banks is too high. At the end of 2003, among the deposit market shares of China's banking institutions, small commercial banks (urban credit unions) only had 0.7% , even if another small institution was added

At present, in the development of "community banks" in China, we must pay attention to learning from the past

The Community Bank originated in the United States. According to the definition of the Independent Community Bankers of America (ICBA),

Community banks are independent small commercial banks and other savings institutions that are independently established and operated by local governments with assets below 1 billion U.S. dollars. There are approximately 8,000 community banks in the U.S., covering 43,000 regions, including North (24%), Midwest (20%), Southeast (20%), Southwest (16%), West (10%), and Northeast ( 10%).

Unlike large banks, which usually deposit deposits attracted from various places to areas where they think they may get the highest yield, community banks absorb deposits from local households and businesses and provide financial services to local households, businesses (especially small and medium-sized enterprises), and farmers .

The risks of banking reform are inevitable, but the risks of not reforming will be greater. To treat community banks, we must be confident and not underestimate the difficulties.

Build method

"New establishment" and "reconstruction" (that is, the joint stock system reform of some existing small and medium banks). Method 1: By introducing private capital, the existing small and medium-sized banks (especially urban commercial banks and urban credit cooperatives) with low risk are reorganized and transformed into a joint-stock system, so as to put them on the track of market-oriented operation. One example is Zhejiang Commercial Bank. Method 2: Introduce private capital into the banking industry by establishing small and medium-sized joint-stock commercial banks (mainly community banks). In the difficult period of China's banking reform, considering the introduction of private capital into the banking industry will undoubtedly inject new power into the reform of China's financial system and achieve the purpose of activating and driving the current stock reform through incremental reforms.

Build pathway

Mode 1: The vacuumization of financial services at the grass-roots level in the economically underdeveloped regions such as the central and western regions, below the county level, and in rural areas caused by the withdrawal of state-owned banks and urban commercial banks from grass-roots financial institutions. Controlling, or jointly transforming outlets into community banks through share cooperation, can not only solve the bad sequelae of outlet withdrawal, but also indirectly solve the problem of license application after the entry of private capital. Mode 2: New community bank. The newly built community bank operates in full accordance with market mechanisms, strengthens risk management, improves internal controls, has sufficient capital, has clear property rights, regulates the operation of corporate governance, and has a well-structured modern new joint-stock commercial bank that is in line with international practice. At present domestic reference can be made to Tailong Credit Cooperative in Taizhou, Zhejiang.

Strengthen supervision of related loans

The investor of a community bank is usually an important customer of the bank. Compared with state-owned commercial banks, community banks are more likely to have related loans, and community loans are also the most likely to cause operating risks to private banks. Private banks are inherently less creditworthy than state-owned commercial banks, and are particularly important for controlling and monitoring related-party loans. The establishment charter should clearly stipulate that no investor loan can be given, and the state should also formulate relevant disciplinary measures in regulatory regulations.

Establish a deposit insurance system

The state does not have ownership of the community banks where private capital enters, and therefore does not assume corresponding credit guarantees. This objectively requires the regulatory agency's prior and ex post supervision as a set. Deposit insurance, as an important ex post measure, helps reduce the loss of commercial banks, especially small and medium-sized commercial banks, from the risk of loss and failure, as well as the possible chain effect losses. As of 2000, 67 countries have adopted clear deposit insurance models, and the relevant systems have matured, which is of great significance to China.