Research On Operation Mechanism Of Rural Informal Finance Market In China

Finance is the core of modern economy. The sustainable development of rural economy, the farmer income increase, the rural industrial structure adjustment and the new socialist countryside construction can not be isolated from the huge financial aid. However, the rural official finance grown up in the progress step by step has tended to weaken the supports for rural areas, agriculture and farmers in recent years. The rural official finance supply is hard to meet the financial demands of rural economic main body so that the difficult problem of finance by the households and rural medium- and small-sized enterprises has obviously cropped up. In this case, the informal finance in rural areas has developed at an ever-accelerating rate. The rapid development of rural informal finance has enlarged the finance channels by the household, relaxed the finance supply and demand contradictions and promoted the farmer income growth and rural economic development. However, since the informal finance drifts away from the national formal finance system and is not subjected to the finance laws and regulations, it has lacked the standardized management in organizations and operation mechanism so that it is extremely easy to cause the disputes of borrows and loans, whereby affecting the sustainable and health operation of this market as well as the harmonious stability of rural society. For this reason, research on the operation mechanism of informal finance market in rural areas is of important theoretical and practical significance in promoting standardized operation of informal finance markets in the rural areas, perfecting rural finance system and boosting the construction of socialist new villages and harmonious society in the rural areas.This thesis channels rural informal finance into the market analysis framework, and such research methods as market analysis, comparative analysis, measurement analysis and questionary investigation are used to carry out the theoretical discussion and utility analysis of operation mechanism of rural informal finance market in China from the demands, supply, interest rate and contract control, etc. of rural informal finance market. The basic conclusions from the studies indicate: the rural informal finance market in China is able to relax the problem of "difficult finance" by the households and rural medium- and small-sized enterprises and also plays an active role in promoting farmer income increase, whose sound operation favors the formation of competitive patterns of rural finance system as well as the perfection of rural financial market. At present, efforts should be made to further improve the operation efficiency of rural informal finance market via the establishment and completion of the relevant systems and also give full play to its active role in serving rural economy. The health operation of this market can further favor the farmer income increase and rural economic growth. Accordingly, the rural informal finance market should be specified only through optimizing the supply environs of rural informal finance market, leading the right drops of borrowing and loaning interest rate and increasing supplies by the informal finance system, so as to give full play to the rural finance markets in serving rural economy.This thesis consists of 8 chapters.Chapter 1: Introduction. This chapter deals with the research background, objectives and significance of this thesis, summarizes and reviews research dynamic conditions concerning rural informal finance by the scholars both home and abroad, and suggests the main problems to be solved in combination of the existing research achievements, makes clear the research thinking and research methods of this thesis and summarizes the likely innovations in the thesis.Chapter 2:Theoretical Basis for Rural Informal Finane Market Research. This chapter firstly gives an explanation and definition for the concept of "informal finance" in this thesis which is of common use but extreme controversy in the fields of economics and finance, and makes clear the conception of "operation mechanism of rural informal finance market " and further analyses the rural informal finance market body and performance mechanism.Chapter 3: International Comparision and Experience Reference of Rural Informal Finance. This chapter recalls the practices of rural informal finance in part of the developed countries in Europe and the United States and the developing countries in Asia and Africa as well as Taiwan region in our country, and summarizes the basic experience of rural informal finance development in these countries and the region as well as the beneficial revelation for improving operation efficiency of rural informal finance market in our country.Chapter 4: Historic Evolution and Achievement Evaluation of Rural Informal Finance Market in China. This chapter analyses the developing process of rural informal finance market, investigates the finance scale of informal finance markets in china as viewed form the national and regional two aspects, evaluates the operational achievements of this markets using the utility analysis and points out that the rural informal finance market can play an active role in promoting the farmer income growth so that it is necessary to specify and guide this market.Chapter 5: Demand Analysis of Rural Informal Finance Market in China. Form the beginning of this chapter, this thesis probes into the operation mechanism of rural informal finance markets from three horizons of demands, supplies and interest rates so as to provide realistic basis for specifying rural informal finance market. This chapter mainly discusses the causes of formation of rural informal finance market demands, investigates into the informal finance demands by the farmer households as viewed from demanding motivations and influence factors and discusses the dynamic causes and obtainability of finance demands by rural medium-and small-sized enterprises.Chapter 6: Supply Analysis of Rural Informal Finance Market in China. Based on the analysis of formulation reason of rural informal finance market supply, this chapter investigates into the fund supply resources of rural informal finance market. These fund resources mainly include the surplus funds of the farmer households and the part of credit funds from the rural official finance agencies, and discusses the influencing factors upon fund supplies of rural informal finance markets given the credit situations, ability to repay the loans, and use of borrowing loans by the farmer households and loan interest rate, etc.Chapter 7: Interest Rate Analysis of Rural Informal Finance Market in China. This chapter firstly carries out the general analysis of the interest rate determination of rural informal finance market. Then it analyzes the existing situation of interest rate of rural informal finance market in our country, points out the features of high interest rate and great regional differences of borrowing and loaning interest rates of rural informal finance, and discusses the formation causes of rural informal finance high interest rate.Chapter 8: Policy Selection of The Specified Development of Rural Informal Finance Market in China. This chapter is the final conclusion of this thesis. Based on the analysis of the above chapters, this chapter presents the policy suggestions for specifying rural informal finance market as viewed form the basic principles of specifications, optimizing the supply environs of rural informal finance market, guiding the right drops of borrowing and loaning interest rate, increasing supplies for informal finance system, etc.