Study On Chinese Rural Micro-Credit Based On Game Theory

Micro-credit is credit mechanisms and financial products that developed from the helping the poor micro-credit system and mixed upon the financial needs of the low and middle income groups, the goal clients of rural micro-credit are farmers and rural micro and small enterprises.Micro-credit produced firstly in Bangladesh in the 20th century 70 years, initially was considered a successful means of poverty alleviation. Through a special system designed to provide poor farmers directly higher interest rates small loans without assets secured , and having maintaining a high repayment rate, which address the funding constraints faced by the rural development by the provision of a new ideas. At present, micro-credit in varying degrees has been developed into an industry. Especially in foreign countries, micro-credit has been gradually achieve the dual objectives of sustainable development and a higher coverage (outreach), having experienced initial development phase of relying on the donors, micro-credit financial implications contained in the rural areas the financial sector is playing an increasingly important role. At present, in many developing countries, micro-credit is the financial industry with a clear social objective, has been not simply focus on poverty alleviation, is more concerned more low-income groups in the provision of financial services. Practice has proved that micro-credit can help low-income people improve their lives, help small businesses grow, especially for the three rural development provide effective financial support and is conducive to a harmonious well-off society.On financial markets in rural areas, rural industrial and commercial enterprises and farmers are the major financial demand. In this view that rural households do not gain loans particularly in rural financial sector in china, this paper analysis will be carried out mainly farmers. Chinese micro-credit is still in the early stages of development, both economically developed areas and economically underdeveloped areas, farmers demand is enormous for credit, while for the credit needs of Chinese farmers, there is the prevalence of the small amount of loans demand. During the analysis of the impact of Chinese farmers current demand for credit, we found it has a positive significant effect on the current credit needs of farmers that farmers once received loans from financial institutions and in the future is expected for loans.Demand is huge in micro-credit market, but supply is very inadequate. The overall level of micro-credit institutions is not high, facing the policy, management capacity and funding constraints. At present, the Chinese micro-credit has the following main forms: non-governmental micro-credit to help the poor; the policy-oriented micro-credit projects helping the poor; formal financial institutions providing micro-credit such the Rural Credit Cooperatives as the main body; the Rural Micro-credit Company emerging in 2005 and the Towns and Villages Bank, the Rural Finance Assistance Unit, the Loan Company entering the market at the end of 2007.Micro-credit is a useful complement of rural financial in china, which supervision is a part of financial supervision in rural areas .which emergence can be regarded as rural financial reform internal structure in china , which own also have the characteristics described above. Because of micro-credit is still in its infancy in china, yet there is no unified about micro-credit laws and regulations , relating to the existing micro-credit policy of regulation in fact focused on the various financial institutions small business credit management, rather than specialized micro-credit organizations. While most people agree that micro-credit institutions should be prudential supervision, but such supervision is not clear what in fact should be included. In short, improving the micro-credit supervision, from its breadth, should be a government regulation, industry self-regulation, internal control, social supervision system of four levels; from its depth, should be involved in risk prevention and cost-effective acquisition, legal norms, simple and efficient operation, such as a system engineering.Chinese rural micro-credit market is a power imbalance and relative asymmetric information system with many participation subjects. In this area, incomplete information and imperfect competition is almost non-existent. In rural areas, because of the wide variety of special forms of supply and demand of funds, the price of funds - the interest rate also showed a variety of forms, does not exist a highly abstract and consistent price parameters. Rural micro-credit relationship between the main body is complex, dynamic and affected by the overall impact on the overall situation and counter-productive ,can not use normal static partial equilibrium analysis to solve the problem. Most importantly, the problem of rural micro-credit, government policies and macro-development strategies are closely related .which has a great relationship with Chinese agricultural , rural traditions and cultural background. Individual rationality and collective rationality, individual rationality and irrationality disputes together complex here. Correctly to define the main micro-credit parties in rural areas, to analyze the game relationship are very difficult. It should be said that there is almost not an abstract economic theory or model which can be perfect to explain Chinese rural micro-credit market clearly, but the economic game theory can explain to a considerable extent on a variety of rational and thinking of the rural micro-credit system, is an effective methodology.Rural micro-credit body for their own existence exist each other game in china, summed up the following several game relationship: the dynamic game within micro-credit providers, in other words, the game between employees and the employer; the dynamic game of incomplete information between micro-credit providers; micro-credit entry market game analysis; the game between micro-credit providers and demand; micro-credit market regulation and violation game analysis; rural micro-credit providers and local government game; micro-credit game between central and local governments.From an international point of view, the mode of operation of micro-credit and development path are very different. Article from the five aspects conducted a comprehensive description, from the micro-credit status of international development, international development of micro-credit model (introduction of the 18 countries or institutions micro-credit model), micro-credit projects in the international comparison, the foreign government supervision of micro-credit, our inspiration of foreign micro-credit.Combination of the foregoing description, corresponding in article the micro-credit main game relationship analysis to put forward the following policy recommendations: to control micro-credit provider game relationships; to analyze the reasons for non-cooperative competition of micro-credit providers, to guide micro-credit providers cooperation; to create the conditions for micro-credit providers and enter to reach the game balance; to effort to realize the demand for micro-credit and providers the largest benefits; to strengthen micro-credit supervision over the market; to achieve full supply of micro-credit government protection; through institutional and implementation innovation to achieve central government and local policies balance game.In accordance with the contents of this article, to use a variety of methods: the empirical analysis and normative analysis methods; qualitative analysis and quantitative analysis methods; static analysis and dynamic analysis methods; system method; comparative study method.This study has important theoretical and practical significance. In theory, first of all, the application of game theory provides a new way of thinking and a good way to solve the problem for China's rural micro-credit study; secondly, Chinese localization of international success model of micro-credit; Third, revealing the role of micro-credit in rural financial market development, providing relevant theoretical basis for Chinese rural financial reform and reconstruction of the rural financial system; Fourth, tracking the latest developments of rural micro-credit; Fifth, analyzing rural micro-credit providers behavior, defining the main game inter-relationship, proposing to perfect Chinese rural micro-credit market policy recommendations. In practice, firstly, in favor of micro-credit to help the poor ;Secondly, to deepen the study of micro-credit to promote its development, make people enjoy equal right of financing will help build a perfect financial system; thirdly, to perfect Chinese micro-credit market policy ,to strengthen the self-force of micro-credit, better to play its "catfish effect."...