Natural Disaster,Social Capital And Farmers' Consumer Credit Behaviors

Most region belongs to rural areas,which are affected by earthquake,flood disaster and other sudden extreme events.The increasingly frequent natural disasters destroy infrastructure and physical capital in countryside,and have a big impact on income and consumption ability of rural residents.What's more,natural disasters give birth to new consumer credit demand.However,the development of Chinese rural finance face imbalance between supply and demand,low capital allocation efficiency,deposit outflows for ages.Among these problems,credit rationing which is led by information asymmetry is most outstanding.In rural duality financial system,for main body of formal credit supply,the capacity to meet farmers,consumption funds demand is very limited and informal credit become farmers' important channels to reply income risk and consumption fluctuation.Because of the absence of catastrophe insurance system,farmers generally lack insurance consciousness and funds,which are used for disaster resistance and alleviation and restoration and reconstruction after disasters,mostly come from government rescue all the time.Serving as core of the rural economy,requirement has been growing for rural finance coming into play.After the WenChuan Earthquake in 2008,our country has made out a series of financial support policies and focused credit resources on disaster area.Formal financial institution should give preferential support to issues of agriculture,farmer and rural area,involving credit examining,fund procurement and other aspects.Considering the particularity of affected farmers' consumer financial demand,credit risk is larger and not necessarily conforms to the principles for formal financial institution's commercial credit,which are profit-seeking businesses.This essay is inspired by conclusion that social capital and other informal institutions can improve farmers' credit behaviors,and investigate whether social capital can alleviate the problem that under the background of disaster formal financial institution rejects the affected farmers.In theoretical analysis,this essay constructs a research framework where farmers who engage in the investment of agricultural production apply for a loan to microfinance institution whose credit is based on relationship and analyses the mechanism of action where social capital affects farmers'consumer credit behaviors,drawing the mechanism where natural disasters affect the supply of consumer credit and social capital's interaction effect.In empirical test,data-based on Chinese Family Panel Studies in 2010,this essay conclude that farmers at present mostly rely on informal financial channels and credit funds are mostly used for housing improvements,medical treatments,current expenses and education by descriptive analysis.By using Probit?Tobit and Biprobit Model,this essay conclude that the availability and real line of farmers' consumer credit or informal consumer credit who live in natural disasters area is higher than farmers' who do not live in natural disasters area,social capital contribute to farmer acquiring formal or informal consumer credit and different types of social capital's effect is not consistent.Specifically,social network,formal credit relationship and group membership help to optimize farmers' formal consumer credit behaviors,human relations and social status mainly affect farmers'informal consumer credit behaviors and social capital can alleviate the adverse impact which natural disaster has on the supply of formal consumer credit.Finally,this essay put forward the following policy suggestions:(1)Construct rural uniform credit system,make use of social capital and other informal institutions to alleviate information asymmetry,construct multilevel formal financial service system by reform and innovation and create more liberal policy environment for the development of informal finance.(2)Further perfect the Government assistance system,social security system and other risk sharing mechanisms' construction on natural disaster and rural poor population,strengthen the support of medical treatment and education,lighten farmer' basic living burden,alleviate income and consumption fluctuations which are caused by external shock.(3)Attach importance to and speed up the construction of financial catastrophe response system,construct institutional arrangements which can effectively diversify and defuse catastrophe risk and offer timely financial service to disaster resistance and alleviation and restoration and reconstruction after disasters.(4)Learn from and take example by other countries,relevant experience,optimize the measures which are taken by formal financial institutions to response to major natural disasters to support farmers' credit.