A Study On Rural Informal Finance Development In Xinjiang From Perspective Of Islamic Culture

Farmers and other business entities' demand for capital is increasing with rapid economic development in rural areas of Xinjiang, they can not rely on the accumulation by itself to met, and need large injection of external funding and support. The lower rate of financial self-sufficiency in Xinjiang and repression existing in rural formal financial formed a demand of informal finance system in rural, objectively. Currently, about the study of informal rural finance, mostly concentrated in the economically developed eastern region,There are less researches to analyze the Informal credit in rural areas from the aspects of geographical and cultural, especially the Islamic culture.From the Perspective of the unique local culture in Xinjiang, based on the study of Islamic culture and the economic and financial ideas, we conducted a questionnaire to survey400households in5prefectures in Xinjiang, and measure the size of loans of Informal finance in rural areas of Xinjiang, and have an objective description and analysis about informal basic features and operation of the financial lending, under the influence of Islamic culture in rural areas of Xinjiang. Second, we search main factors of the rural informal financial borrowing, and Reveal the correlation between the rural informal finance and rural economic development. Finally, we raise development path and policy recommendations about the informal finance in rural areas of Xinjiang. The core content and the main conclusions are as follows:1. Islamic culture and economic and financial characteristics in Ethnic Areas in Xinjiang. We start from Islamic culture in Xinjiang, and summarized the characteristics of traditional ethics of Xinjiang Uygur, whit deeply analysis of the Islamic economic thought and the main principles of Islamic finance, form and characteristics and so on, Focus on the Islamic culture of informal financial thinking。(1) Reaffirm the principle of non-interest, and prohibit improper profits.(2) Principles of risk-sharing and profit-sharing.(3) To promote the principle of legitimate behavior of savings.(4) Church's Law is the supreme principles and the prohibition of speculation.(5) To replace the secular lending relationship with the way of Islamic bank.2. Ethnic economic development in rural areas of Xinjiang. First, we start from the county economy in Xinjiang, comparising the indicators of GDP, industrial structure, net income and other rural residents in different economic regions, as well as compare them with the mainland. We concluded that there is a big gap between the overall county economy in Xinjiang and the developed provinces in the eastern areas and there is the Uneven regional development in Xinjiang, Showing the non-equilibrium state that the North is strong than the South in Xinjiang. Secondly, we use the model of extended linear expenditure system to study the consumption level of rural residents in Xinjiang, structure of consumption and consumption tendencies and characteristics.3. Characteristics of capital supply in ethnic rural areas of Xinjiang. In this part, we analyze the supply situation in rural areas of Xinjiang from two aspects which including financial support for agriculture and the support from the formal financial for agriculture. First, we cited the Financial Support for Agriculture into the forms of Ruke Bu-Douglas of agricultural production function to study the contribution that Fiscal Expenditure on the agricultural economic growth, we concluded that it make relatively small contribution to its total output value of agriculture, forestry, animal husbandry and fishery of the Xinjiang. Second, we make the statistical description of Xinjiang's formal financial resources in rural areas, Rural Formal financial institutions declines and rural funds are reverse outflow. Rural credit and agriculture in the national economy does not match the status of the rural in the whole country, and financial repression resulted in obstacles to rural economic development.4. Study on the Development of Rural informal financial and operating characteristics under the influence of Islamic Culture. First, we sort out400questionnaires about rural informal finance from the five prefectures in Xinjiang through the field research and analyze farmer's perception of the rural financial services in Xinjiang. Based on the measuring of the scale of informal finance in rural areas of Xinjiang, we concentrate on the behavioral characteristics of lending of informal finance in rural areas under the influence of the Islamic culture in Xinjiang.5. Empirical analysis of informal rural financial development in Xinjiang under the influence of Islamic culture. According to the theory related to the informal finance previously in rural areas and sorting to the questionnaire, we raise the corresponding theoretical assumptions, and selected the top-five explanatory variables of Farmers human capital, household wealth, social capital, legal environment, financial environment to Analyze of these factors will, respectively, make different effects to the formal financial and informal rural financial lending behavior, Islamic culture is the important factors that influence people's borrowing from the informal finance in rural areas of Xinjiang.Then, the rural formal finance and informal finance as a complete ecology in rural financial, and then consider the factors of financial support for agriculture, the use of gray correlation analysis, explore the Xinjiang rural formal finance, informal finance, and rural economic development of the internal association. We then use the analysis of Gray correlation to explore the internal association between Xinjiang rural formal finance, as well as informal finance and rural economic development.6. Development's path and policy recommendations in Rural Informal Finance in Xinjiang. As the influence from Islamic culture and its unique social function to the Informal finance in rural areas in Xinjiang, we first proposed to four basic principles should be followed to regulate and guide the rural informal finance in Xinjiang, and we then proposed the development's path and policy recommendations targeted in informal financial in rural areas of Xinjiang, which mainly Include:(1) full play to the Islamic finance's concept of good credit, and promote harmonious development of society.(2) Reasonable standards and protection of informal finance in rural areas, mechanisms about the establishment of rural informal financial market's access and exiting.(3) Regulate local conditions to guide the establishment of the financial institutions with the Islamic culture.(4) to strengthen the Islamic traditional financial instruments, and to innovate lending tool used in Muslim rural informal finance.(5) to strengthen the supervision of Islamic financial business, the establishment of rural informal mechanisms for monitoring and analyzing of financial lending.