Research On Rural Credit Technique Devising: Based On A View Of Information Economics

From the view of realities in Chinese rural finance system, one of the most important problems is the deficiency in credit services facing rural families. It is connected with higher-level information asymmetry phenomena in rural areas. The article wants to find a way to solve the problem from the angle of mechanism devising. By doing so, credit supply to rural families may increase and total social welfare may be better.The logical idea of the article is to start from methods to solve the problem of information asymmetry in rural financial market. After analyzing the market condition, credit demand of rural families and their basic information structure, we will compare the efficiency of farming land mortgage and microcredit system to solve the difficulties in rural families'credit, using the economic mechanism devising approach. We will further analyze the beneficial methods to enhance the efficiency of different credit techniques and promote some suggestions.The main point of view is that the valuation of different techniques of rural credit is a complex job. Generally speaking, if we are not in a very incomplete market, then microcredit and farming land mortgage system both are better than the traditional rural credit model. That is, they both fulfill the incentive compatibility condition. What's more, farming land mortgage model can be better in efficiently using information than microcredit model. That is, the former is more suitable to fulfill the information using condition than the latter. On the other hand, which of the two models is better to enhance the total social welfare is connected with different market circumstances. That is, which rural credit model is better to fulfill the resources allocation condition relies on the parameter of market conditions. Therefore, in order to promote the efficiency of rural credit models, we should better the contracts and their execution of microcredit technique to better fulfill the information using condition. Moreover, we should guarantee the microcredit method to be used in the middle-level perfect market and the farming land mortgage method to be used in the higher-level perfect market to fulfill the resources allocation condition. Considering that rural land mortgage method is compliance with the direction of history, we should prepare as early as possible to improve the market circumstances and create suitable conditions to use the brand-new rural credit technique.