Research On The Financial Support Policy Of The Rural Credit Guarantee

The shortage of capital has become the bottleneck to solve Three Rural Issues. For the economic strength of small and medium-sized enterprises and rural farmers is weak, small-scale peasant economy of self-support, the existing policy of financial support to agriculture of our country, the existing defects on institution and function of financial institutions in rural areas, institutions not willing to extend the loan in amount. Solving the capital shortage of agricultural and the difficulties in loans of enterprises and farmers need to improve the system of finance, credit, and land in our rural areas as well as other relevant policies. Among these, the credit guarantee is a safeguard measure that could ensure the bank credit capital. It has significance in speeding up the capital circulation, promoting the benign interaction between enterprises and bank encouraging the development of small and medium-sized enterprises. But the development of credit guarantee in rural is slow, even stagnates, because of factors bring out of dual economic structure of urban and rural areas, such as the financial difference between urban and rural areas, the lack of effective security, the credit flaw of rural economic entities, and the in-adaptation between corresponding legal system of credit guarantee and rural environment. Poor guarantee brought the rural economic entities into credit trouble, sparked a series of problems to be solved, and restricted the development of rural economy.The rural credit guarantee system includes two basic elements:one is the mortgage guarantee system, which is based on, and the other is the third party credit guarantee system, which takes human as carrier.As the main property of the countryside, rural land played a critical role in the whole process of the property rights mortgage financing. The characteristics of farmer’s right to use of land determined that land use right is appropriate for serving as mortgage in rural land financial system. On one hand, it can solve the difficulties in farmers’ loan problems; on the other hand, it can reduce the risk of operating rural financial institutions. Then fund shortage problem of agricultural development can be solved. But at present, mortgage financing of farmland property rights in our country is still in the initial stage, there’s a lot of work need to be done in the future to establish a farmland financial system, which is suitable for China’s national conditions. Therefore, from the national strategic perspective, this paper proposes that the government should take fiscal measures, play financial function, to solve the problems that occurred in the establishing process of this system, deal well with all kinds of contradictions.As the microscopic subject that playing function in rural credit guarantee, credit guarantee agencies make the information asymmetry between farmers and financial institutions transparent to some extent; reduce the loan risk of financial institution such as banks, the difficulties in financing difficulties. Therefore, constructing our country’s rural credit guarantee system has practical significance. However, the typical characteristic of rural credit guarantee makes market a serious problem. The rural credit guarantee has a big external economy, it is a high-risk industry, and credit guarantee product has the characteristic of quasi-public goods, this makes the development of rural credit guarantee can’t depend entirely on the market mechanism to promote. The government’s support, especially financial support is very important.Based on the two problems mentioned above, this paper put forward that the government should use fiscal measures and play fiscal function to resolve the series problems appeared in the process of rural land financial system construction, deal well with all kinds of contradictions. In the same time, it is necessary for the government to use direct investment, financial subsidies and tax incentives and other ways to give financial support in credit guarantee of small and medium-sized enterprises so as to resolve the problems of capital and loan difficulties for rural enterprises and farmers. The main content of this paper is as follows:(1) The research of related problems about rural credit guarantee systemThe rural credit guarantee system is a comprehensive one, and the development of rural credit guarantee system need simultaneously two aspects of the construction of the basic content:rural mortgage guarantee market and rural credit guarantee agencies.1) Take the property rights system reform in the rural areas as an opportunity to the development of rural mortgage guarantee market.The space of finance through mortgage is limited because of chattels in farmers’hands is less and not the main form of their property. And the rural property right system in our country is complicated, the relations of ownership, contract right, and the right of management are not clear, greatly limits the development of rural property mortgage financing. Therefore, the rural property rights system reform is the first step of expanding rural mortgage guarantee market. Take the opportunity of right system reform in the rural areas, and follow this trend, then set up the rural property mortgage guarantee market.2) Constructing the rural credit guarantee agenciesCompared with the credit guarantee agencies in cities, rural credit guarantee agencies have the following characteristics:the rural credit rationing phenomenon was significantly higher than the cities, the public nature of rural credit guarantee market and market failure phenomenon were more serious; the rural credit guarantee agencies guaranteed more for farmers’loan. This need large amount of service, and increased the difficulty of management; the relationship between rural credit guarantee agencies and rural credit cooperatives was close, in order to reduce risk in the process of guarantee, the rural credit guarantee agencies try cooperate with rural credit cooperatives to innovate the mode of loan. In the early step of rural credit guarantee system construction, referring to the development mode of urban credit agencies, we should develop such credit guarantee system that giving priority to policy guarantee agencies, supplementing by commercial and mutual guarantee agencies.3)The introduction to the rural mortgage guarantee and interaction mechanism of rural credit guaranteeFirst of all, whether mortgage guarantee, or credit guarantee, the service target is consistent, that is to alleviate the contradiction between supply and demand of rural credit, reduce the information asymmetry of both sides of the rural credit parties, and increase the loan opportunities for farmers and the rural small and medium-sized enterprise. Second, rural credit guarantee can not lack of mortgage. Credit guarantee agencies only transfer the risk but cannot remove the risk by itself. Removing risk usually need the counter guarantee or re-guarantee. Last but not least, in the development of rural property mortgage financing process, credit guarantee auxiliary is needed, especially in the early stages of the rural property transactions, polices that allowed the mortgage of the land of some local governments were against with current laws. Banks are confronted with great political risk in the mortgage process, so participation of political guarantee agencies is needed, in order to strengthen the security of property right of the guarantee. (2) The financial roles and functions in the rural credit guarantee system1) In rural property rights system reform, the establishment of series system needs financial funds support.In the early step of rural property right trading construction, large amount of investment from government is needed, such as the fixed assets investments in purchasing of exchange land, constructing of basic installation and equipment system and other aspects, as well as some incentive measures, for instance, the subsidies to register and management that specially used for farmland circulation, the subsidies to the rent and working allowance of intermediary agencies, and tax relive to those intermediary institutions that have good service effects. In addition, finance plays the supportive role in bearing cost that appeared in the process of indeed the right, setting up a government agency for evaluation and improving the institution of rural mortgage financing risk allocation and so on.2) In aspect of the rural credit guarantee agencies, we need to distinguish the different nature of these agencies, and then adopt different supportive strategy. For the political guarantee agencies, we should make full use of the financial founded function, and cover the operating links of political guarantee agencies comprehensively in use of capital. For the commercial guarantee agencies, we should use financial measures to guide them into rural market, give preferences in taxes, and make conditional compensation to the capital that appeared in the management process. For the rural mutual guarantee agencies, political supports should be more than fund support. Our government should play the adjustment function of fiscal policy, induce the cooperation among kinds of financial institutions, mutual guarantee agencies, and prompt the innovation of credit guarantee.3) In aspect of the alternative mechanisms in collateralEstablish rural guarantee loan system through the financial subsidy way, and through the financial way to improve the environment of joint guarantee lending and the optimization of its form, increase the types and volume of interest rate for the loan subsidies in order to reduce the over-rely on the rural collateral.(3) The complete set of rural credit guarantee system and fiscal policiesWith the development in recent years, rural credit guarantee system, especially those refer from foreign mode have become relatively perfect. However, the ways to promote the rural credit should not be limited to the guarantee; it also needs financial, legal, and cultural means. From the view of rural financial ecological environment construction, analyzing some important economic system and measures that working on rural credit guarantee as well as the relations between them then discuss the support policy on rural credit guarantee at the macroscopic level, so as to ensure a better development of rural credit agency and guarantee system. In the view of this paper, the systems that having the most closely contact with rural credit guarantee including the agricultural insurance system, rural credit system, and rural social security system. There is a very clear logic connection between these systems and the rural credit guarantee. Therefore, it is necessary to re-integrate the relevant capital that used for agriculture support, and ensure the matching system of rural credit guarantee at the level of servicing rural economy and finance.