Analysis of China's Financial Management Problems of rural credit cooperatives

Paper Keywords Financial Management strategies of rural credit cooperatives, rural credit cooperatives, Financial Management abstracts the rural economy is an important part of management, but also the rural areas of the hot and one of the difficulties present, China's rural credit cooperatives, there is a simple function , the overall quality of personnel, not high, faced with this grim situation, the reform of rural credit cooperatives to realize, it is necessary to further improve and strengthen internal management, improve management, enhance their competitiveness. This article focuses on analysis of the current Financial Management of rural credit cooperatives problems, and propose a solution related countermeasures.


Financial Management of rural credit cooperatives, rural credit cooperatives is that the financial activities of corporate credit and financial revenue and expenditure activities of the funds to plan, organize, regulate and control the general. With the rural financial system reform, rural credit cooperatives have begun to independent of the face of market is facing increasingly fierce international competition situation, the rural credit cooperatives to realize the change to the modern financial industry must further improve and strengthen internal management. However, China's rural credit cooperatives in the actual situation of Financial Management, financial management, did not play its role in the management How to use scientific tools of financial management, rural credit cooperatives to improve the management level has become a modern financial industry will be focusing on problem.

First, the financial management of rural credit cooperatives Analysis
Financial management of rural credit cooperatives from the current situation, it is in financial management from the traditional to a modern financial management of the transition phase, mainly in the following areas:
(A) serious financial management, decentralization of power, responsibilities, rights and interests are not uniform
No independent property and credit qualification to carry out major financial activities must be authorized by the parent. The financial responsibility of workers and the asymmetry of power, resulting in a loan "farm" of tendencies and "rent-seeking" behavior, lack of credit capital allocation efficiency, non-performing assets rising rapidly, increasing financial difficulty, can not be reflected in the financial management functions. imbalance in the financial management function mainly as follows: The main focus for the financial activities of deposit and loan, financial revenue and expenditure, profit plan to carry out three aspects can not be around the actual situation of ever-changing business development to achieve the purpose of dynamic management, financial aspects of focusing on ex post accounting, and advance, something rarely involved in control.

(B lack of scientific indicators
Work in financial management, credit deposits and loans, capital structure, risk management, financial analysis, a lower proportion of the lack of appropriate indicators to measure the financial work. At present, Guangdong farmers to regulatory authorities issued five assessment indicators in the country have been walking in the forefront of reform, relatively complete, but still not a comprehensive survey of credit unions operating conditions, especially for the expenses of a single index assessment, only "a comprehensive cost rate" one, although the forward than the cost of quota management a big step, but still not enough science, while in central and western regions, especially in poor areas of the credit, not to establish a scientific and rational system of indicators to measure the level of its management, operating results, the contribution to society, weakening of the credit supervision, restricted the healthy development of credit unions.

(C accountants quality is not high, accounting-based weak
Main features: on the one hand many accountants are halfway decent, no professional study, work by outside factors, it is difficult to adhere to principles, the authenticity of accounting work affected the other hand accounts of dealing with non-standard, white bars arrived in libraries, accounted for the phenomenon serious, and some subjects properly, mark incomplete, so that does not match the accounting accounts accounts, account card does not match the accounts are not consistent in serious condition, the standard used is too simple, is too narrow, resulting in imperfect credit segment reporting, financial reporting non-standard, the current results are basically the disclosure of historical cost measurement model of the traditional income statement, information disclosure is not complete, generally only in the past financial position, operating results, the lack of correlation can not be provided for managers and regulatory authorities warning signal.

Second, the causes of financial problems of rural credit cooperatives
(An ambiguous property rights, can not form a unified financial management system
Financial management as an economic and management activities will be subject to the constraints of ownership structure, the formation of different ownership structure of different financial management. Chaos in financial management of credit unions for many reasons, but the most fundamental factor is the credit system of property rights defects of rural credit cooperatives after decades of change, accumulated over the years the property factor in the formation of very complex, both the support of national policy, its national support of the banks, as well as the accumulation of the labor of rural credit cooperatives, whose property rights are very ambiguous difficult to quantify, while a long time, so that central and local power to the rural credit cooperatives as a rural local financial institutions to facilitate the positioning of local government intervention in rural credit cooperatives, rural credit cooperatives as a property owner never exercised all with the power to create a real owner in place, there is no clear financial management functions of the service principal.

(B owner vacancy caused by the rural credit cooperatives can not form a reasonable internal governance structure, the operator can not form an effective supervisory
The principals and the agent of interest bias, in the owners, creditors, managers, regulators multi-game, due to asymmetric information, supervision and restraint mechanisms weaken, the agent in pursuit of status, power, personal income, little or no power consider the client's interests, let alone seriously carry out the principal-agent contract, there has been a large number of "moral hazard" behavior, such as "internal control." Without a sound internal governance structure, can not form a unified financial management system, financial management inevitable irrational phenomenon, rural financial institutions, three objectives: to improve financial sustainability, lack of necessary institutional infrastructure, it is difficult to achieve.

(C financial management objectives are not clear
For a long time, due to repeated changes in the management system of rural credit cooperatives reform and opening up to ten years between 1996, the rural credit cooperatives to accept the management of the Agricultural Bank, its financial management objectives, that is for the ABC service, act as primary business The role of the housekeeper, for the ABC to provide sufficient operating expenses in 1996 Comicsonair decoupling, the rural credit cooperatives has accepted the PBC and the CBRC's management, financial management goal is simply to control costs, the need to maintain the normal operation of .2003 years, began to promote a new round of "clear property rights, improving corporate governance institutions" as the main content of the reform, the rural credit cooperatives was transformed into the county rural farmers, small businesses and credit unions for employees of small and medium sized county employees financial enterprises , began to pursue the maximization of profits for shareholders into the areas of financial management objectives. However, due to the inertia of thinking, coupled with the low quality of the majority of shareholders, mostly farmers, and shares many of the original motivation for farmer members just to get preferential loans from the, very weak sense of their shareholders. Subject to the financial management objectives in the regulatory authorities to prevent and defuse financial risks need to, financial management objectives tend to blur.

(Four were not high quality financial
Hunan Agricultural University, according to 2004 surveys of workers in the rural credit cooperatives, the titles above the intermediate level less than 10% have a college education less than 30%, of which accounting practitioners in less than 10% have received tertiary education. On the one hand, credit association, credit union's financial managers are mainly appointed by the executive director and county finance staff, general aging of the knowledge structure, financial management, poor awareness, lack of modern financial theory necessary to understand the changes, can not cope with changing financial environment on the other hand, a long time, the formation of nepotism and relationships, so that some genuine talent, principled, self-motivated and strong financial officers are not reused, so an exodus, but college graduates of professional personnel because of the lack of good competition, there is no corresponding mechanism for the distribution of income elasticity, it is difficult recruitment, financial management structure is not updated, can not raise the level of financial management, leading to significant financial problems are not promptly and effectively resolved, is subject to credit reform constraints, its functions are not fully reflected, so the phenomenon of brain drain is more serious.

Third, the new situation, measures to strengthen financial management of rural credit cooperatives
With China's accession to the WTO, China's social and economic environment has been greatly affected, the increasingly competitive financial sector, rural credit cooperatives in the changing environment, how to adapt and develop, is a serious problem. Links to free download http://www.hi138.com (a sound financial management functions of the credit
Financial management functions to be performed is conducive to the smooth realization of operating results, financial management functions of the credit mainly for financial reporting, asset management, internal control and supervision.

1. Asset Management
According to the China Banking Regulatory Commission in 2005, statistics show that in July 2005, the deposits in rural credit cooperatives 3.064 trillion yuan, accounting for financial institutions to total deposits 10.83%, has become a major force in supporting rural economic development. Credit should actively into the market, make an inventory of the funds, increasing the value of assets currently extensive development of micro-credit has had a significant positive effect, should be based on this idea and to explore new channels for capital appreciation. Generated from operations for the system and a large number of non-performing assets, should speed up the spin-off: one can learn from the experience of commercial banks, the establishment of asset management companies, divestiture of non-performing assets, the other rural credit cooperatives should accelerate the pace of dealing with bad assets, you can take clear income, auction, swap, debt and other forms of non-performing assets inventory.

2. Internal Control
First, to strengthen internal accounting control system. To improve the tight internal control system, accounting bookkeeping, accounts processing and operating results to be completely independent, to follow the standardization, supervision, checking accounts, and security of the precautionary principle, the establishment and implementation of accounting internal control system, establish a reasonable system of authorization of responsibility, in accordance with operational procedures and authorization, integrity, and improve various approval procedures, while the computer system to establish a scientific system of risk control. Secondly, the financial cost management efforts, strict control of costs expenditure, reduce operating costs, will make an inventory of the stock of assets of rural credit cooperatives combined with optimized incremental, focusing on "new" and "old" unity in the development of clear income and indigestion loans. Finally, the rural credit cooperatives to strengthen financial supervision revenue and expenditure management, and turn losses into profits of rural credit cooperatives in the acquisition or construction of fixed assets prior to the approval procedures in accordance with prescribed procedures to perform, and the association of rural credit cooperatives, rural credit cooperatives, credit shall not raise funds or transferred funds to build its own office building of rural credit cooperatives, of rural credit cooperatives and association of violating financial management regulations, misappropriation credit funds, the construction of office buildings and the purchase of cars, must be severely punished, and held director of rural credit cooperatives association director's responsibility.

3. Monitoring and evaluation
Improve the supervision and evaluation mechanism, set up a complete evaluation index system, and as an objective, impartial and comprehensive evaluation of credit unions operating conditions. One is to establish parity of core indicators in order to achieve total profit, return on equity-based performance evaluation system, Second, a complete evaluation index system. evaluation index setting, is necessary to consider credit unions to achieve short-term benefits, but also take into account the requirements of long-term development credit unions, we must highlight the performance indicators, but also the factors of non-normal surface, to overcome evaluation of the incomplete and not objective, to ensure scientific and rational assessment of the results of three assessment criteria are the same industry, to promote the standardization and standardization of evaluation work, the work is comparable, the competition to promote the development of credit unions.

(B) strengthen the financial team building, improve the quality of management accountants
1. Strict recruitment links
Hiring highly qualified staff of the financial sector, financial management through the development of credit unions to provide information in a flexible mechanism for the appointment of personnel, an effective incentive mechanism and a unique corporate culture, to attract and stable high-level financial management personnel to further Credit Union's financial management system specifications, to improve financial management.

2. Strict financial cadre selection off
The selection of cadres in the financial business strictly on assessment, assessment by the masses, party validation process, to ensure the quality of good ideas, business ability, levels of management and personnel selection to the theory of financial good work up.

3. Improve the quality of staff
Uphold and improve the financial mechanism for training of cadres, strengthening the infrastructure at all levels of professional accountants, grasp a short training, rotation, correspondence, and other types of self-study training, while the actual close contact with professional academic education, and effectively promote the accountants to learn new knowledge, master the new policy, enhance the new quality.

This paper analyzes the status of rural credit cooperatives, mining because of the financial management of rural credit cooperatives ideas: ideas to improve staff awareness, and establish a new concept of modern enterprise financial management; based on the actual, complete internal control system, a sound financial system, stringent internal management, continuous learning and training, to improve the quality of personnel by strengthening the financial management of rural credit cooperatives, rural economic development.


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