The Impact Of Interest Rate Marketization On Supplier And Demander Of Rural Credit Market In China

The main object of this thesis is to analyze if interest rate marketization can abate the loan difficulty of farmer households and rural SMEs. This thesis analyzes the impact of interest rate marketization on supplier and demander of rural credit market in China by the method of market equilibrium, information economics, behavior analysis, system analysis, game theory etc. according to the profit margin of different farm produces.The main conclusion is that the ascending of loan rate can't restrain the fund demand of farmer-households and rural SMEs, their loan difficulty will be abated gradually during interest rate marketization. Rural finance institutions will benefit from the broaden gap between loan rate and saving rate in the short run, but it should improve its efficiency to realize the persistence in the finance in the long run. The main points are as follows:Firstly, interest rate level in rural credit market may ascend in the short run. However, after a time, loan rate may either keep stabilization in the higher level or descend when the contradiction between fund supply and demand abates. Anyhow, loan rate during marketization will be higher than that in controlled period.Secondly, the rough estimate result shows that the average profit margin of agriculture and rural SEMs is 20% and 12% respectively, even loan rate reaches 12.83%, agriculture and rural SEMs can endure the highest loan rate allowed, farmer households and Rural SMEs will benefit from interest rate marketization and have more opportunities to obtain the demand funds. However, the profit margin of wheat, rapeseed and pig is low, therefore, the fluctuating of loan rate will do harm to the producers of wheat, rapeseed and pig.Thirdly, rural finance institutions will benefit from the broaden gap between loan rate and saving rate in the short run, but it should improve its efficiency to realize the persistence in the finance in the long run.Fourthly, RCCs should strengthen the inner control system, establish interest rate risk control system, and institute the price principle of finance product in order to abate the disadvantage impact of interest rate marketization on itself.Fifthly, it is necessary for the government to take measures such as providing credit support for wheat producers, making the finance supervise system perfect, establishing interest rate risk monitor and early-warning mechanism, and finance organization seceding safeguard mechanism, to abate the disadvantage impact of interest rate marketization on supplier and demander of rural credit market.The main innovation points in this thesis are as follows: calculate the contribution of controlled interest rate to peasants' income; analyze the competition behavior between suppliers by industrial organization economics approach; and analyze the gain and loss of parters from cost and income aspect.