A Study On Inclusive Rural Financial Reform Theory And Practice In China

Rural finance has been recognized as a tough work and also an important element to rural development. Yet the rural poor have been largely neglected by formal financial intermediaries for poverty, low population density, highly operating risk, expensive transaction costs and limited opportunities for risk diversification. Against the background when China is in the key period of rural economic development and deepening of rural institution, rural finance is the major issue in Chinese rural society.The "Build Inclusive finance System"has been formally put forward on the Third Plenary Session of the 18th CPC Central Committee Concerning Comprehensively Deepening Rural Reforms."Inclusive finance" has been the first written into the party’s resolution, which means the arrival of opportunity of the development of financial inclusion.Owning 1.3 billion population of whicheight hundred million is living in the rural area, the development of rural inclusive finance is the of most important necessity to Chinese rural socity.Therefore, theory and practice in rural inclusive financial reform has gradually become a hot focus of academic attention.Inclusive rural finance is different from the conventional microfinance poverty alleviation model, Different from the operational goal of microcredit, inclusive rual finance will take much regards for self-sustainability when boast promotion of finance services to the rural poor. Since 2003, China has begun to implement reform of rural credit cooperatives and in 2008 the central number one file put forward to speed up the system reform for the rural finance. During 2006-2011,China has established 24 rural financial reform pilot area, where 6 pilot areasaim to build rural financial system of which,the red revolutionary base in Guangxi Province,Tiandong is one of 6 rural financial reform experimental zone.With more paradigm, it attracts national-level the attention to the quality of its reform of the whole society, especially the problem of poverty in the old revolutionary base areas.According to years of financial work experience, inclusive type of rural financial reform and development of on-the-spot investigation and questionnaire, this paper starts withinclusive rural financial reform theory and practice as the main line of investigation, extensively absorb the inclusive rural finance-related research results, combined with domestic and international inclusive practices in rural finance and rural reform performance, reproducibility, countermeasures in Guangxi Tiandong using empirical analysis, and then suggests ideas and strategies of inclusive rural financial reform theory and practice in our country.The main research contents and framework in this paper:Firstly from the historic perspective this paper attempts to expound the definition of inclusive finance and market characteristics of rural finance, structure, system as the starting point, the binding nature of rural finance, the binding nature of the inclusive finance development patterns, financing, credit model, costs issues related to income and credit incentives were analyzed, trying to explore the inherent nature of rural finance property; Secondly, on the basis of carding the related theories, investigated the domestic and foreign typical patterns of rural financial reform practice and experience,at the same time,described the current status of inclusive rural financial development in our country; Thirdly, with the development of the theory of the law on rural finance,this paper conducts research upon our country approach in rural society, and suggests the transformationfrom of "Agency theory" to "function view" and "government" to "market" to "government and the market," and extends the theory of the evolution of the law of rural financial reform, looking for the fusion point of inclusive finance and rural financial theory, on the basis of theory and practice,suggested the new ideas of inclusive rural financial reform and development. Fourthly, by focusing on the "Tiandong mode" special financial reform in the context of Tiandong village, substantive (characteristics), the qualifications of replication, problems and so on, this paper postulates that "Tiandong mode" can be copied as a general conclusion;In the end, based on the successful Tiandong case and experience at home and abroad in rural finance, government, this paper suggests what measures can be taken from the perspective of government, financial body and financial new formats, innovation, selection of the market.The main conclusions are as follows:Financing:A agreement has been reached on the basic gaming analysis of rural finance both in providing and requiring subjects, this papers finds out only the government intervention ensuring the efficiency of rural financial market and incentiving the involvement in agricultural activities of rural financial intermediary, additional supervision over financing behaviors of rural households, can the Pareto progress be made to reach the equilibrium within the supply and demand. Integration of theory:On the basis of combining inclusive finance with rural finance this paper concludes that the rural micro-credit is the point of the fuse of rural finance and inclusive finance. Compatibility:Based on previous findings and some relevant thesis on scale economy, marginal return, this paper suggests that only the financial outreach have already reached an amount with growing commercial transacts in agriculture, can the earnings of financial institutions be increased so as to accomplish outreach and self-sustainability. Through the both theory and practice of both in rural financereform investigation, this paper proposes development of China’s rural financial reform ideas:to establish a comprehensive fully and effectively rural financial market system fulfills its financial capabilities, so that the majority outstanding farmers, low-income people and small businesses, etc. who are informal financial excluded can be timely access to affordable, safe and convenient financial services. Therefore, after taking into consideration of the rural financial reform policy measures, the government should implement best practices and innovation strategy from top-level design such as rural financial reform policies, scientific planning and overall integration with variety of factors positiveinteraction including the government, financial institutions and financial instruments, innovation, marketing and others to booast inclusive rural finance sustainable development, and ultimately build and improve rural financial markets of Pratt & Whitney service model and service system.