Research On Compaction Of The Rural Households’ Borrowing Behavior In Shaanxi Province, P.R.China

With China’s reform and opening up and the rapid development of economy,“ThreeRural” Issues are becoming severe and urgent solutions needed is a common understandingfor all sectors of the society now. The construction and perfection of the rural financial systemnot only influenced and restricted by the development of economy and society, but also closeconnected with the development and main characteristics of the financial demand of the“Three Rural”. As the most basic unit of the agricultural and rural economic development, therural household is an important participator in the rural financial supply system, a judge in thecurrent rural financial system, and also a contributor and benefiter in rural economicdevelopment. Therefore, studying their financial demands, their choice and the differencesfrom the demand perspective, is significant to adjust and perfect the existing rural financialmarket system, promote rural financial innovation, and provide the financial productaccording to the rural househlod demand, improve their fund demand satisfaction andpromote the development of the economy and society in the rural areas.Shaanxi province is located at the western part of China, which is relative lag behindthan the eastern and south part of China in economy. It is processing the important periodfrom the traditional agriculture to the modern agriculture now, the differentiation phenomenonof agricultural production mode and efficiency in this area is becoming more and moreobvious. So the study of the characteristics and differences of the rural households’ borrowingbehavior, can not only enrich and perfect the research for the rural households borrowingproblem, but also can provide theoretical support for the research of supply of the ruralfinance in the less development areas.Based on the above research background and the present stage need for the developmentof the ruralareas, this dissertation treated the rural households’ borrowing behavior in Shaanxias research objective, through detail survey of rural households, and statistic compare thedifference of rural households’ borrowing behaviors. On that basis, the dissertation analyzedthe difference of the rural households’ borrowing behaviors, their loan choice andcharacteristic and difference while facing to the formal rural financial market and informalrural financial market. Finally, found the difference of the rural households’ borrowing behaviors and the insufficiencies of the rural financial market..Some suggestions such asbuild the platform for sharing all the information for the rural financial services, classify therural households according their financial demands, promote the rural financial innovation aregiven to promote the development of the economy and society in the rural areas.In the view of above, the main research contents are as follows:Chapter one: Introduction. This chapter is mainly about the background, significance,literature review, logic of the dissertation of the selected topic, and the main methods and thepossible innovation.Chapter two: Introduce the related theoretical basis of the rural households’ borrowingbehavior. Using rural households’ behavior, rural households’ borrowing behavior and therelated rural financial development theory, analyzed the form factors fact the ruralhouseholds’ borrowing behaviors and the supply of the financial market.Chapter three: Introduction and rural households’ main characterstics of the research area.Based on the background of the rural households’ borrowing behaviors, analyzed thedifference of the householders’ characteristics, their family characteristic, production andoperation characteristics, balance of their payments, and the characteristics of rural financialsupply market. Analyzed the relationship of the rural households’ production technicalefficiency and the characteristics of the rural households and the financial market by using theISDF (Input Stochastic Distance Froniter) Model. The result shows that, the ruralhouseholds’ production technical efficiency is68.1%, which still has great potential to beimproved, and also found that the householder’s characteristics, the distribute of labor andcapital input (for farming and off-farm) and the rural financial market environment aresignificant to the improve of rural households’ production technical efficiency.Chapter four: Empirical analysis of the rural households’ financial demand behaviours inShaanxi Province. Analyzed the rural households’ borrowing demand behavior, includingwhether they have the financial demand, the type of their demand and the amount they need.The results show that69.5%of the rural households have the financial demand, and tenfactors of the five main types of the rural households’ such as the householder features, familycharacteristic, production and operation characteristics, income and expenses, and theenvironment of the rural financial supply market are significant to the rural households’financial demand. For the type of the rural households’ financial demand, the highestpercentage is for living consumption which is55.3%, then is the demand for productioninvestment. Seven factor of three types of the characteristics of the rural households aresignificant to their financial demand area, they are the householder’s characteristics (age,gender, migrant workers experience), income (income level, main source of income) and the environment characteristics of the rural financial market. For the financial amount,61.4%ofthe financial demands are less than10,000RMB, which means that the microfinance areneeded in this area. The education of the householder, their income and the time to the nearestformal financial institutions are significant to the amount they need.Chapter five: Empirical analysis for the rural households’ financing choice behaviours inShaanxi Province. This chapter analyzed the choice behaviors in the rural households’borrowing behaviors, including the loan source that the they want and the recognition to thefinancial supplier. The results show that most of the rural households prefer to borrow moneyas a kind of “help each other” from their friends and relatives without any interest, and thepercentage is more than80%.For the loan with interests the Agricultural Bank of China, theRural Credit Cooperatives and some other formal financial institutions are prefered by therural households’, while few of them has involved in the informal financial institutions. Therural households’ are more satified for the private individuals for its equity, loan term, interestrates, procedure, and amount than the other financial institutions; more satified for the formalfinancial institutions for their policy propaganda and service; more satified for AgricultureBank of China for its policy propaganda and loan term; more satified for the othercommercial banks for its loan amount and service.Chapter six: Comparative analysis for the rural households’ borrowing behaviors in theformal financial market.Analyzed the details of rural households’ borrowing behaviors in theformal financial market. The rural households are longing to participate in formal financialmarket, but the percentage of them who got money is somewhat low and most of them willlack for the suitable collaterals. The difference whether the rural households will choose toborrow money for the bank under the current interest are significant among the ruralhouseholds with the different characteristics of the householders(gender, migrant workersexperience), family features (labor average age), the main source of income of rural financialmarket environment characteristics.Chapter seven: Comparative analysis for the rural households’ borrowing behaviors inthe informal financial market.Analyzed the details of rural households’ borrowing behaviorsin the informal financial market. Very few of the rural households have the experience ofborrowing money from the usury and private lenders. The reasons of the rural householdsborrowing money from informal financial market are for urgent, convenient, flexible and lowinterest. Borrowing money from financial institutions is for the convenience and availability.The characteristics for borrowing money from friends and relatives are more frequency, smallamount and available. The difference for the transaction cost of the rural householdsborrowing money from different financial providers is significant. Chapter eight: Policies for optimizing the rural households borrowing behaviors. Somesuggestions such as building the platform for sharing all the information for the rural financialservices, classifying the rural households according their financial demands, promoting therural financial innovation according to the main conclustions of the research.Chapter Nine: Concluding remarks. Introduced the background and the main founds ofthis thesis. The deficiency and the future research are also discussed.