Research on the Exploration and Practice on Forest Property Mortgage Loan of Liaoning Province in China

Transcription

1 Research on the Exploration and Practice on Forest Property Mortgage Loan of Liaoning Province in China YU Lihong, LIU Gaoli School of Economics and Management, Shenyang Agricultural University, China, Abstract: For a long time, forester and forestry enterprise had been threatened with financing predicament in China, so that the development of forestry industry suffered severely hamper. Forest property mortgage loan has searched the way for solving financing difficulties for foresters and helps visibly diminish financing predicament of foresters and small and medium-sized enterprises. Taking Liaoning province as an example, this paper introduces achievements and existing problems in Liaoning province since developing forest property mortgage loan, proposing relevant suggestions finally. Keywords: Forest property mortgage loan, Financial innovation, Liaoning province 1 Introduction Forest property mortgage loan is a new loan product which is issued forest property license by the competent forest authorities, based on woodlands and forest ownership as a pledge.along with the Innovation of forest Property System, which comes up as a new thing of forestry financing system. One hand, forest property mortgage loan can effectively resolve the foresters and forestry enterprises financing difficulties, and promote the rapid development of forestry economy, and promote farmers to get rich. The other hand, it can open up new business areas for the financial institutions themselves, enhance the quality and management benefit of credit assets. So, Forest property mortgage loan is a real thing that benefits the nation and the people and plays an extraordinary role in expediting the new rural construction. Liaoning, as a pilot province of the collective forest tenure reform, at present, the main reform has been completed. To deepen results of the collective forest tenure reform, forestry department and financial institutions of Liaoning province work together to solve the difficulties in Financing Guarantee through closely following-up course reformation for the collective forest tenure reform and actively introducing business for the collective forest tenure reform. The business of Forest property mortgage loan takes the lead in Benxi and Dandong as the experiment site in Liaoning Province that Benxi and Dandong are two forestry resources leading markets. Business began to carry out in early 2007, since that, forest property mortgage quickly recognized by the majority of farmers. By the end of 2009, The province's balance of forest property mortgage loan has exceeded 1.3 billion, which relieves hard fund-raising of forester and arouses the enthusiasm of farmers planting investment, In addition, which strong support of the Liaoning Provincial forestry development and foresters to get rich,revealing a good ecological, economic and social benefits, but, we also recognize that, after all, forest property mortgage loan is a brand new mortgage loan business, is still at the pilot stage of exploration, business development still faces many difficulties and problems, we should pay attention to it. 2 Forest Property Mortgage Loan Obtains the Achievement and Presents New Characteristic 2.1 Forest property mortgage loan obtains the achievement In recent years, through the Liaoning province government and the related department's impetus, Forest property mortgage loan lends business develop at a steady pace and the difficulties in financing for forester obtain the alleviation to a certain extent. Forest property mortgage loan has promoted from the experiment site to the surface on and made the tangible progress. 118

2 Firstly, forest property mortgage loan carried out orderly, and loan balance exceeded 1.3 billion. Liaoning Province provided the entire province first forest property mortgage loan in Benxi's Huanren county in January 24, 2007, by the end of 2009, Forest property mortgage loan of the entire province develops well, whose balance sum tops 1,300,000,000 Yuan, these funds have supported Liaoning's forestry development and the ecological construction powerfully, the credit release lever's skid move the effect to be day by day obvious. Leveraging effect of the lever of bank credit has become increasingly evident. Secondly, to promote the work of forest property mortgage loan, 14 cities of the entire province have developed the forest property mortgage loan. In early 2007, The business of forest property mortgage loan takes the lead in Benxi and Dandong as the experiment site in Liaoning Province that Benxi and Dandong are two forestry resources leading markets, After the Zhao yang, Tiling, Fushun and other cities gradually pushed, whose treads further expand, at present 14 cities of the entire province have developed the forest property mortgage loan, and Benxi, Dandong, Fushun develop quickest. Business began to carry out in early 2007, since that, forest property mortgage quickly recognized by the majority of farmers, which relieves hard fund-raising of forester and arouses the enthusiasm of farmers planting investment, promotes the development of forestry economy and speeds up construction of the socialist new countryside in Liaoning province. Thirdly, guiding the foresters to put in the fund reasonably, and enhancing security and the benefit of loans. Forest property mortgage loan as a new means of financing inject a powerful vigor for develop production revenue of forester. Liaoning actively guides and encourage forester to put forests mortgage loan funds into the industries, whose risk is small, the cost is low, and the benefit is high. According to the survey, about 80% of forest property mortgage loan foresters get uses in forest land projects such as economy development, forest planter and woodworking and so on; And another 20 percent using in forestry other projects, the major is developing alternative country leisure tourism, processing, countryside poverty, etc. Forest property mortgage loan services turn the tangible forest resources into spare money, which effectively activates the forest resources assets and plays a positive role in developing rural economy and adjusting the forestry production structure. Fourthly, implement preferential loan discount policies and further benefiting people. To arouse the enthusiasm of foresters participating in forest tenure reform, alleviates their burden, Benxi city of Liaoning province first introduced preferential forest property mortgage policy, Policy regulation, to personal property of the forest property owners with forest mortgages for forestation, forest and forest economy development projects, if all of projects reach technical code,government will giving 50 percent discount. Therefore, every accords with discount-interest range of forest property owners, already will forest in mortgage funding for forestation and forest and development input woodland economic projects production, by forest owners to their own towns the competent forestry authorities put forward earnings, which applies for city, county finance, forestry department for examination and approval after passing by financial on earnings. Interest rate accords to the actual interest rate loan interest rate of 50 percent payment. 2.2 The new characteristics of forest property mortgage loan Since July 2009, forest property mortgage business developed at an astonishing fast speed, and presented new features in Liaoning province, started from the following three main areas to be analyzed. One is the mortgaged property scope have somewhat expanded. The competent forestry authorities actively communicate with the local banking sector, gathering public welfare forest into the forest range of mortgage loans and expanding the imposition of financing range, which is through the Liaoning provincial and conscientiously implement the people's bank of China Shenyang branch and five department allots the preparation for the collective forest tenure reform and forestry development financial services the implementation opinions notice spirit. Second is family contracting primarily grassland-use property certificate mortgage increased and financing surface of foresters is expanding, which broke the forest property mortgage with large primarily situation. During implement early of 119

3 forest property mortgage loan, professional investors among loans are more and small mortgaging under 10 million have a small proportion. Currently small mortgage also develop rapidly, only Qingyuan county of Fushun forestry comprehensive service center will accept imposition of loans amounted to more than 30 pen every day. Three is borrowing purpose is diversified, before loans of foresters have many aspects of the development of forestry industry. Current loans for forestry outside project also started to increase, such as the development of farm, the countryside, leisure tourism, processing, countryside poverty, Diversification loan purposes 3 Problems in the Forest Property Mortgage Loan Forest property mortgage opened new doors in financing development of forestry; however, as we are still on the primary stage of the forest property mortgage loan business so, it has some the actual problem to be solved. 3.1 Forest property mortgage settings is incompatible with forestry production characteristics Firstly, Loan term short. Characteristics of tree growth are a long life cycle, restricting factors and need longer loan term limit. And at present range of forest property mortgage belong to short-term loans varieties in Liaoning, Loan period normally the longest do not exceed 5 years. For small and medium-sized enterprises, loan time limit of natural person is in commonly within 1 year, the longest do not exceed 3 years. In this case, Trees not enter cut period and Customers have no ability to realize comprehensive payments, which may exist phenomenon of loan expire default and the problem that forest production cycle time and financial credit problems do not match. Secondly, the financing cost is high. financing cost of applying for forest property mortgage is high, which contain burden loan interest, In addition,also including evaluation, registration, notarization, guarantee and so on a series of expenses in the mortgage process. Finally, loan mortgage rates are low. Forest assets adjustable of financial institutions is low For example, according to the evaluation value of 1/3 lending in Fushun and in Benxi following the proportion is 30 to 40 percent, usually less than evaluation value 50percent, the forest property mortgage loan amount is small, which affected the enthusiasm of using loan. 3.2 Risk dispersion and transfer mechanism of forest property mortgage loan is not sound Forestry insurance plays an indispensable role in reducing credit risks, helping foresters of post-disaster recover production quickly and promoting forestry production stable development. But, at present development of forestry insurance lags behind, to a certain extent, which has affected the forest property mortgage business development. Main show is forest insurance are not widely available, manage compensate high starting point, insurance premium rates on the high side, and planted a single. Currently, only open forest fire insurance, insect pest risk, frost risks and illegal felling of risks have not run. In addition, some guarantee company strength is insufficient, and guarantee rate is higher, forest property mortgage lack risk compensatory mechanism, forestry and financial environment needs further improvement. 3.3 Service system of the forest is imperfect First, development level of the trading market of forest resources assets is low, the principal transactions quantity is limited and market liquidity is low, which affects financial departments to carry out the claim. At present although it has established forestry service center, and providing counterpoising truly, evaluation, registration, and supervision of service for foresters and financial institutions, but its function not fully, forest property circulation is not enough smooth, which cause financial claims are difficult to achieve. Secondly,lacking of forest property appraisal institution of authority and fair. Due to the lack of effective supervision mechanism and no unified standard of forest property evaluation, there is real value to assess the price and tree deviates from the situation, many more for the mortgage of trees to evaluate the price is virtual high, affecting the security of bank credit funds. Finally, the uncertainty 120

4 of timber harvest index increased the risk of default the lender. According to the management regulations of the current wood cutting index, Trees that are in cut down period or thinning period may not cut with no cutting index,and borrowing the imposition and no other funds returned due loans, thereby affecting the loan returned. 4 Countermeasures and Suggestions 4.1 Make credit policy to suit for forestry production characteristics Firstly, in setting loan time limit, loan time limit matches with forestry production cycle as far as possible, and do well the renewal work according to the actual situation. Because income of forestry industry cannot one-time gain and the way of loan repayment should also be flexible to determine, which can installment in proportion to repay the loan for alleviating their pressure. Secondly, Simplified loan procedures, reduce the financing cost. According to the symmetrical principle of benefits and risks, the loan pricing should be reasonable and loan interest rate level should be scientifically adjustment, which should be helpful for extending credit business of banks and lowing imposition of burden. Meanwhile, design fee, assess fee, independent inspection fee and other fees should be reasonably determine, and further reduces the cost of financing and reduces their burden. Thirdly, to execute different rates of loan mortgage. Because of different tree species and cultivate age, and also different credit risk, Therefore loans shall apply to different mortgage rates, reflect requirements of risk management. Four,It should be appropriate lowed loan authority of examination and approval and reduced link of examination and approval, simplified loan procedures, improved loan efficiency, which provide convenient and fast credit service for foresters. 4.2 Actively establish the forestry loan insurance mechanism and diversified risk guarantee system As an important mechanism of enhancing the resilience of forest risk, Forestry insurance is not only beneficial to quickly resume production for the forestry production operators after disaster, promoting the stable development, and through can reduce the risk of forestry investment, improve the forestry financing environment and promote forestry sustainable business. Insurance institutions should pay attention to the experience of forest insurance pilot and actively open insurance coverage of forest assets, And according to the forestry production characteristics, Insurance institutions should study and design possible insurance-related,insured measures, and appropriate simplify procedures so it can open up a new approach on resisting risk for forestry production. At that time, the government should implement premium subsidy policy; reduce the burden on the insured farmers. Insurance institutions shall widely publicized knowledge of forestry insurance and insured significance through a variety of channels; improve insurance enthusiasm of foresters, which can construct a favorable atmosphere for developing forestry insurance. In addition, it should gradually establish guarantee system of forest property mortgage. Such as,it shall encourage all kinds of guarantee institutions to introduce forestry financing guarantee business, establishment credit guarantee system that conforms to forestry and rural, and vigorously promote with specialized cooperative organizations as the main body, form mutual guarantee system by forestry enterprises and foresters of voluntary membership or contributive. And besides, it shall encourage all kinds of guarantee agencies to intensify the forestry financing guarantee service through re-guarantee, joint guarantee and guarantee and insurance combining and other ways. 4.3 Improve and perfect the system about forest management and service Firstly, it should strengthen the construction of forest property circulation market. It can gradually built trees trading market that is similar to the stock level of trade market by relying on existing forest service center, and Implement open, fair and just market transactions, which can make the forest property mark of Circulation and disposal listed in tree trading market. And a tree trading market free services or collects a few service charges. Within the stipulated time if the forest property mark cannot be executed, 121

5 Through negotiate between creditors and debtors, policy forest center storage disposal according to certain value, so that it can effective maintenance interests of creditors and debtors. Secondly, establish and perfect forestry asset appraisal system. First, perfect evaluation system of forest resources and assets, formulate a detailed asset valuation methods of forest resources, and use value of the forest land as forest assets included evaluation content, all of which reflect the true value of forest resources. Then, Form professional forest resource asset appraisal institution, and standardization, systematization, science to develop the forest resources assets evaluation, which can ensure the interests of both lenders and borrowers, further reduce evaluation registration fee and alleviates their borrowing costs. So that they can actively promote the forest property mortgage normally operate. Thirdly, promote the innovation of forests cutting management system. For the forest management unit of forest tenure reform in place and property clarity, Forestry institutions shall actively guide the scientific establishment forest management plan and implementation of forest management plan based on cutting use policy. In the loan overdue, the competent forestry authorities actively assist financial institutions to do the disposal work of the mortgaged property, if the mortgaged property accord with cutting conditions, Forestry institutions shall arrange for the forest tree cutting index priority and promote credit fund timely recovery. In addition, Forestry institutions must complete the registration and management work of grassland-use property certificate, ensure it authenticity and legality, and ensure properties and interests of the mortgagee's legitimate. In a word, under the impetus of the Liaoning province government, Financial institutions to be creative and bold explorations, in forest property mortgage there are many beneficial attempts, which have made some achievements, but also some problems.therefore, only if financial institutions, forest departments and the government cooperate whole heartedly, and will exert better forest property mortgage in Liaoning province forestry development in the role. Acknowledgment: This paper gets the subsidy of the funds. This paper is a phased achievement of the project of scientific and technological drawing room of Liaoning Province ( ; ), the social science plan fund project of Liaoning Province (L10CJY025; L09DJY098), the project of education department of Liaoning Province(W ), the young fund of Shenyang Agricultural University and the young fund of school of economic management of Shenyang Agricultural University( ) References [1]. Mao Xiaorong, Chen Shitong. Survey and thinking of forest property mortgage loan in Lishui city, Forestry economy, : p18~21 (In Chinese) [2]. Zhao Xianbo, Lidong, Investigation report of forest property mortgage loan about Liaoning, Forestry Economy, : p18~20 (In Chinese) [3]. Pan Xuejun, Yang Guangxian, some problems of forest property mortgage analyze, Regional Financial Research, : p86~87 (In Chinese) 122