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Abstract
The farmers’ credit unions of Taiwan had the relative contribution in providing the fund of farmers’ need and accelerating the development of agricultural department in the past more than 40 years. In recent years, the default debt of the farmers’ credit unions climbs up suddenly and the ability of making profits glide down fast, therefore the innovation of the farmers’ credit unions is imperative. According to the particularity of agricultural finance makes process difficulty. In "National Conference of Agricultural Finance" under the mutual recognition and expedites childbirth, executes "the Agricultural Finance Law" in January 30, 2004, the establishment of National Agriculture Treasury will develop the new direction for the peasant association finance in the future. However the farmers’ credit unions must become the shareholder system of the National Agriculture Treasury only and then has the opportunity to develop the sustainability. But the threshold of entering the shareholder system of the National Agriculture Treasury is the net worth of the farmers’ credit unions that must be the positive number.
In view of this study is explored an avenue to elevate the net worth of the farmers’ credit unions, therefore the introduction of mortgage backed securities system is needed. According to the experience of the financial organ is besteading in mortgage backed securities practicing both foreign and domestic system that is helped the farmers’ credit unions to solve the net worth to be low and the difficult position of the fluidity to be low.
This study is using the literature discussion and the analysis of deeply interview. The feasibility of mortgage backed securities (MBS) practice in farmers’ credit unions specifically discusses the question which the farmers’ credit unions at present faces, and which the experience and correlation questions (law, risk and market) of implementing MBS both foreign and domestic part.
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The result of this study showed that the farmers’ credit unions is not only the initiative organization for the negotiable securities sign, but also its nature completely tallies with law, therefore the farmers’ credit unions implements the MBS to lay the legal foundation. The farmers’ credit unions may develop type of product, should be "Pass-through construction" the negotiable securities. So the application of financial product is such as MBS of special purpose trust or real estate MBS in farmers’ credit unions.
The farmers’ credit unions implement the MBS to produce the feedback value：The promotion of the management ability in property and debt, the diversification of capital source, the promotion of the fluidity in balance sheet, breaks through the bank law to loan the amount limit, the enhancement loans the quality, by the free income substitution spread income.
Above the feedback value is obviously approving the question that the fluidity and the promotion of net worth in the farmers’ credit unions. For the nature of credit in farmers’ credit unions, whether is entrusted with something for an external issuing agency in bigger confidence and the attraction .The development of negotiable securitization depends on improvement in financial transparency and reduces the ratio of default debt by the operators in agricultural finance.
The result of this study not only may provide the farmers’ credit unions to introduce the MBS direction, but also may provide MBS respectively to be entrusted with something reference an issuing agency new potential market.
Key words: The farmers’ credit unions, mortgage backed securities (MBS)
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