The Route Choice For The Innovation Of China's Rural Finance Supply

Issues concerning agriculture, countryside and farmers, is related to the overall situation of Opening and Reform Policy as well as the modernization construction. It's a big problem to solve from now on. The development of rural economy cannot be separated from the promotion and support of rural finance.The essay using panel data from 29 districts, through the way of full sample, diachronous and trans-regional, analysis the influence agricultural financial institute and agricultural loan exerts on agricultural economy. The author also finds out the main reason of the lack of formal supply to Chinese rural finance. It is because the anisomerous messages. The author also analyses advantage and disadvantage of both formal rural finance and informal rural finance. The innovative ways to increase rural finance are provided.Rural finance refers to a generic term of the financial institutions and instruments supporting rural production and operations including formal finance and informal finance. For the relation between finance and economic growth, whether they're interacted and symbiotic or they share causality, there exist arguments in the academic circle. The article getting the relationship between Chinese financial development and economic growth by empirical analysis, seizing the exogenous change which is independent of economy,( great revocation and merger of agricultural bank of China in 1998), researches on the relationship among rural finance service, rural credit and rural economic growth. The empirical result shows that the finance promotes rural economic growth greatly and it's the theoretical principle of the proposition that declares increasing rural finance supply promotes the development rural economy.The behavioral subject of rural financial market in China is analyzed by using theories of information economics and concludes that the key factor of rural finance repression in China is asymmetric information. The article next analyzes rural finance gap in China and endogenous gap resource of rural economy in China. It is found that serious information asymmetry exists in rural formal finance and the rural informal finance is suitable for rural economy and it has an obvious information advantage. And then the supply of non-formal finance is analyzed. Its situation and features of development is concluded, and its rationality is analyzed from cost and benefit with the relevant model by using further information asymmetry theory. The advantages and disadvantages of formal and informal finance are also analyzed.The key of rural finance problem in China is information asymmetry. The article puts forward three methods solving the information asymmetry of rural finance market. First, the mutually beneficial cooperation of formal finance and informal finance increases rural finance supply to bring about the multi-party win-win. The money scale and management advantage of formal finance and information advantage of informal finance are complementary. A game analysis of rural credit is absorbed by using information economics theory, game theory and different selections of formal finance, informal finance and peasant household game. Finally, it is derived that the win-win selection of formal finance, informal finance and peasant household is realized by cooperation and mathematical derivation and proof are achieved by use of game model. Secondly, the innovation of guarantee and collateral can effectively solve the problem of message sending in information asymmetry market. The guarantee for option is a valid way solving the problem that guarantee companies won't supply guarantees for rural innovative small and medium enterprises. It is proved by mathematical deduction. Constructing a rural insurance system could expand collateral to realize the coordination of rural finance supply and demand. Third, microcredit is a new model of rural finance service suitable for rural economy and information characters, whose operation system could solve the information asymmetry of rural finance market, especially the moral risk problem in rural finance market. And it's a developing direction of rural finance service in China.