Problems and Countermeasures of Financial Risk Control in Agricultural Products Supply Chain

Problems and Countermeasures of Financial Risk Control in Agricultural Products Supply Chain

At present, the risks of agricultural products supply chain mainly come from credit risk, pledge depreciation risk, business operation and technical risk. Then, the following are the financial risk control problems and measures I share with you about the agricultural supply chain. Welcome to read and browse.

Risk sources of agricultural supply chain finance

When it comes to the risk control of agricultural supply chain finance, we have to say its risk source. At present, the risks of agricultural products supply chain mainly come from credit risk, pledge depreciation risk, business operation and technical risk.

1, credit risk

Credit risk refers to the possibility that the borrower can't fulfill the obligation of repaying principal and interest on schedule, which makes the platform and investors face the loss of principal and interest. Agricultural supply chain finance involves the majority of small and medium-sized farmers, farmers, agricultural enterprises and related logistics enterprises, and problems in each link may affect the stability of agricultural supply chain. There are subjective and objective reasons for the formation of credit risk. In addition to the repayment difficulties caused by natural and man-made disasters, poor management and market risks, subjective factors may also lead to default or untimely repayment, and even local folk customs may lead to collective default.

2. The devaluation and circulation risk of pledged goods

In practice, the risk control of agricultural products supply chain usually adopts the secured mortgage mode, and the third-party logistics enterprises generally provide warehousing services, so the warehousing management risk of collateral bears the brunt. At present, there are many logistics enterprises in China, and their professional level is uneven. It is inevitable that there will be similar problems such as improper management leading to loss of goods and improper storage leading to deterioration of goods.

Followed by the depreciation of collateral and circulation risk. When the borrower fails to perform the contract, it will involve the realization of the pledge. If the collateral depreciates or its liquidity is not strong, it will also affect the fund recovery of the platform.

3. Business operation and technical risks

Business operation risk refers to the risk caused by internal control failure and business personnel's operational errors. In addition, the platform that introduces big data risk control management system also faces technical risks such as technical failure and data loss.

Risk control measures of agricultural supply chain finance

In view of the common risks of agricultural supply chain finance, according to the author's understanding, the P2P platform will mainly take the following targeted measures.

For the credit risk, according to the principle of prudent investigation, check all aspects of the borrower's credit and business operation. Subjectively, we should not only check the borrower's historical credit records, but also combine local customs and habits to see if there are large-scale default and collective credit risk events. In business, sales, capital turnover and industry yield are basic. Reference indicators, combined with specific borrowers, but also depends on their historical income, operating years, education, marital status, family background. Of course, it is necessary to predict the short-term market situation of their industry if conditions permit.

For the depreciation and circulation risk of pledged collateral, joint guarantee with a third party is required when warehousing, and the logistics party and business personnel will also inspect the goods irregularly. In the choice of collateral, we should consider the possibility and liquidity of its depreciation, and strictly control the loan amount and the value ratio of collateral (according to the specific conditions of different collateral, the loan amount generally does not exceed 70% of the market value of collateral, and agricultural supply chain products can be controlled at around 50%).

For business operations and technical risks, unify systems and norms, strengthen the training of business personnel, and conduct regular and irregular business exchanges and learning. The platform that introduces big data risk control management system should be maintained regularly and data backup should be done well. At the same time, it is necessary to deal with unexpected situations such as hacker intrusion and temporary failure.

The dispute between direct marketing and franchisee mode

The risk control of agricultural supply chain finance usually has two modes: direct operation and franchisee. At present, there are many disputes about direct operation or franchisee in the industry. Here, the author takes Yi Shan loan and pterosaur loan as examples to see the advantages and disadvantages of different models.

Direct mode: Yi Shan loan.

At present, all business sites of Yi Shan Loan must have their own risk control personnel present, otherwise they will not conduct business. The agricultural supply chain projects loaned by Yi Shan are mainly located in Xinjiang and Heilongjiang. When there are many asset businesses and insufficient risk control personnel, risk control personnel often fly thousands of kilometers to audit projects. At present, Yi Shan Loan is also deploying personnel from the headquarters to form its own independent risk control team through local recruitment and training.

Advantages: The biggest advantage of direct mode is that it can unify risk control standards and reduce the incidence of bad debts as much as possible.

Disadvantages: The disadvantages of the direct mode are also very obvious, which will increase the cost of risk control and is not conducive to rapid scale.

Franchisee mode: pterosaur loan

Pterosaur loan chooses franchisee mode, and franchisee is responsible for user acquisition, due diligence and post-loan collection. A core problem of franchise mode is to design the profit distribution well. In the early stage, we should give franchisees enough profit space to attract more people to join, and the marginal profit will decrease in the later stage. At this time, it is necessary to ensure that the interests of franchisees are directly proportional to their investment, so as to develop for a long time and avoid the situation that franchisees harm the interests of the company.

Advantages: the overall risk control cost of this model is low, and it can quickly complete the staking, which is conducive to the rapid appreciation of assets.

Disadvantages: How to unify the risk control standards and the management of franchisees at all levels will be a difficult problem.

The three principles of risk control cannot be shaken.

In the large-scale risk control mode, each platform can have its own choice and characteristics, but the author believes that the three principles of risk control, namely, unifying standards, adapting to local conditions and prescribing the right medicine, are unshakable.

The first is to unify standards. Whether it is the direct operation mode or the franchisee mode, it is necessary to standardize the system design, including the risk control process, risk control measures, and post-loan collection management. In this way, all projects can be reviewed and distributed with a complete process as a guide. Direct mode has certain advantages in unifying risk control standards. After all, the company sent risk control personnel. The franchisee model should also establish risk control norms to guide the cooperation between franchisees at all levels.

The second is to adapt to local conditions. According to local conditions, including the selection of risk control personnel, local personnel are often more familiar with local customs, and it is more conducive to business development after recruitment and training nearby. According to local conditions, it also includes the choice of asset projects. The agricultural supply chain is very large and there are many products. Each region has different agricultural advantage projects. Try to choose local characteristics or advantages to develop assets. Adapting measures to local conditions also includes winning the support of local governments. Due to the particularity of agricultural supply chain, with the support of local governments and policies, both asset development and risk control will get twice the result with half the effort.

Finally, risk control should be the right medicine. It is effective to adopt different treatment methods for different risk types, and the risk control design of the platform should also consider its own asset model and positioning.

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