Modern financing tools and their riskiness in the context of innovative directions of development of educational institutions

Abstract

The article aims to analyze and assess the risks of lending projects in China's higher education field. The following research methods are used: survey-analytical, systemic analysis, and synthesis. It is emphasized that China must strongly support the development of private educational institutions, attract all possible resources to invest in the higher education industry, and constantly improve the quality of teaching in higher education institutions, which will contribute to the future economic growth of the territories. It has been proven that credit projects in higher education institutions have differences in identifying potential risks compared to lending to the real sector of the economy. It has been argued that the public nature of higher education and the autonomy of private colleges and universities make private colleges and universities responsible for paying principal and interest on loans. On the other hand, under certain circumstances, private colleges and universities can transfer credit risk to the government through appropriate legislative measures. The risk management evaluation system should have five levels: environment, risk assessment, management activities, information and communication, and internal development. These five levels are considered the leading indicators, each of which highlights the key elements of risk management. The hypothesis has been proven that banking institutions should build a risk assessment system based on the main characteristics of educational institutions with tools for effective risk management. It is calculated that educational institutions belong to organizations with high risk. The prospects of the study consist in the further substantiation of the main instruments of adoption, transfer, and reduction of the degree of risk of lending to educational institutions. Keywords: loan, risk, risk management, banking institutions, educational institutions, economic growth, efficiency, innovations.