Study On The Effect,Risk And Governance Of Rural Private Lending In Xinjiang

The CPC Central Committee and the State Council have always attached great importance to rural financial reform.Entering the new century,the development of rural finance has received the unprecedented attention.Since 2004,more than and 10 consecutive years,the Central Document No.1 is highly focused on rural financial development issues,and according to the “supply-side structural reform” ideas,the whole country is speeding up the establishment of a multi-level,wide coverage and sustainable modern rural financial service system,the financial services in rural areas have made great progress after taking various measures,not only the rural formal finance in the management model,governance structure,service functions and other aspects have been significantly improved,the construction of new type of rural formal financial organizations is also basically formed,the precise poverty alleviation financial model has also entered the stage of exploration and promotion at the same time,the gradually complete rural financial service system has greatly alleviated the problem of farmers' funding gap.However,there is still a bigger gap between rural financial development and the actual demand.The stickiness of rural financial system from the top to bottom and two urban and rural financial structure which is extractive leads to a higher degree of formal financial exclusion in rural areas,the rural formal finance shows a clear "bonsai finance" in poor rural areas,the phenomenon of reverse flow of rural funds is serious.Therefore,the farmers can only seek the rural private credit and other private financial channels to match their own financial needs,and as the supplement to rural formal finance,rural private lending widely exists in in rural areas and has a high proportion with its endogenous advantages,while the development of rural private lending in accordance with the traditional way also encounters many obstacles,it is difficult to reach its potential boundary of supporting agriculture,the existence of the loan risk has a greater risk,and with the scale and scope of loan continuously expanding,the loan risk will be more harmful,which is not conducive to the healthy development of the whole rural financial system and the socialstability of the region.Therefore,the operation type,operation mechanism,supply and demand factors,welfare effect,risk and governance and regularization path selection problem on rural private lending,is an important topic in the current rural financial market development to be solved.In view of this,this paper takes Xinjiang as an example,based on the data of household survey,the paper makes a theoretical analysis and empirical study on the effect,risk and governance of rural private lending in Xinjiang.The results show that:(1)By outlining the evolution process of rural private finance in Xinjiang,and pointing out that the rural private finance exists the main organization forms which include the rural folk ROSCA,rural cooperative fund,pawn shops,private banks,rural credit and private lending,this paper reveals that the rural private lending as the highest proportion of the rural private finance to play an important role in the financial credit channel.And the rural private lending is divided into three types of friendly rural private lending,medium interest rates of rural private lending and high interest rates of rural private lending,which respective characteristics are pointed out.At the same time,the paper points out that the operation of private lending in Xinjiang mainly depends on the constraint mechanism of reputation constraint,the constraint of related transaction contract,the restriction of social capital and the reciprocity of reciprocity.Then,by constructing the theoretical model,the paper analyzes the rural households' welfare level in rural private lending with the different relations of rural private lending and rural formal finance,it is pointed out that it is a more effective way to expand the boundary of rural private lending,and it is considered that it is more beneficial for farmers to obtain credit funds directly from private financing channels.And the study indicates that there are many problems including that the credit funds flows to non-agricultural areas,loan contract is not standardized management,credit legal protection is not complete,the efficiency of credit fund allocation is unbalanced in the region,credit funds is introduced into the illegal field,illegal fund-raising phenomenon exists and usury proportion gradually increases in the process of rural private lending in Xinjiang.(2)By separately studying on the factors influencing the demand and supply of rural private lending from external and internal levels,we find the external factors affecting the demand for rural private lending that mainly include the financial system arrangement,geographical location of farmer who is the borrower,social network chain,market price of crops,natural disasters and other force majeure;The internal factors affecting the demand forrural private lending mainly include the transaction costs required for the establishment of a lending relationship,repayment terms,mortgage terms,income of farmer who is the borrower,and the major activities at home;The external factors affecting the supply for rural private lending mainly include the savings rate and return on investment of formal financial institutions,agricultural investment project,difference between urban and rural capital returns,the absorbing ability of other rural private financial organizations,and the extrusion effect of new rural formal financial organizations;The internal factors affecting the supply for rural private lending mainly include the rural private lending rates,repayment ability of farmer who is the borrower,and the degree of information symmetry of rural private lending.Then,by integrating the rural private lending and rural formal finance into the quadri-variate probit simultaneous equation model,this paper makes a more accurate identification of the factors affecting the supply and demand of rural private lending from the quantitative point of view.And the robustness test shows that the estimation results are robust and reliable,At the same time,we find that there is a significant complementary relationship between rural private lending and formal financial institutions.(3)This paper points out the impact of rural private lending from positive and negative aspects,then we construct a theoretical model and find that farmers face credit constraints in the case of asymmetric information.And according to the theoretical analysis results that Credit constraint has an inhibitory effect on farmers' production and operation profit,we constructs a theoretical model for measuring welfare effects and concludes that rural private lending has a positive net welfare effect in the fully competitive rural financial market,it is pointed out that the size of the effect is mainly determined by the factors such as the interest rates in rural financial markets,interest rate elasticity of supply and demand of rural financial credit funds,transaction volume in the lending market,and the offset of the supply function of rural financial credit funds.After exploring the behavior of farmers' credit decision,using the micro survey data and based on the propensity score matching method,this paper separately estimates the effect of rural private lenders' lending behavior on by using the ATE model,ATT model and ATC model,and then we verify the reliability of the estimation results by means of the balanced test and robustness test.The estimation results shows that the household net income,household consumption expenditure and household production andbusiness investment are affected in different degrees by the lending behavior of rural private lenders.(4)This paper elaborates the formation mechanism of the default risk of private lending from the aspects of non systematic default risk and systemic default risk,then it constructs the game model and concluds that the high interest rate of private lending is the main cause of the default risk of private lending,and by establishing the theoretical model,we find that the larger the size of the private lending corresponds to the higher the default risk of private lending without considering the level of interest rates.Then we constructs the mixed model that inlcudes the genetic algorithm,support vector machine model and Binning algorithm identifies and evaluates the default risk of rural private lending,the results of the model estimate distinguishs the level of default risk of farmers' private lending,which is helpful to discriminate the credit risk of different farmers.Furthermore,we constructs the semi parametric ordering model quantitatively recognizes the influencing factors of default risk of rural private lending,so as to provide effective reference and enlightenment for avoiding and controlling the risk of private lending default according to the influencing factors;At the same time,according to the investigation and empirical analysis,this paper finds that the risk sources of default risk of rural private lending mainly include the risk of use of private lending,the risk of private lending subject,the risks of private lending contracts,the risk of private lending term,the risk of private lending scale and the risk of private lending rates.(5)According to the above conclusions and the characteristics of private lending,this paper puts forward the governance strategy of the external risk,internal risk and group risk.Designing the external risk aversion mechanism,external risk relief mechanism,and matching insurance mechanism of private lending manage external risk,the external risk aversion mechanism mainly includes designing the screening mechanism of loan contract,establishing the private lending regulators and lending database,giving the normal legal status of private lending;Putting forward the three ways that mainly includes designing the performance mechanism of rural private lending,optimizing the form of rural private lending,and setting up the collaborative governance strategy of rural private lending manage the risk of rural private lending;By means of the progressive power caused by the self-consciousness of the village,this paper designs the risk management mechanism of the village self-organization loan.At the same time,in order to deal with the weakening of governancesystem,we puts forward the new governance system elements to strengthen the governance system,so as to make the system at the same time both self enforcing and self reinforcing.(6)On the basis of risk management,this paper puts forward six effective ways of the normalized choice for rural private lending,which mainly inlcude providing a similar operating environment to rural private lending and let it formally run as a formal financial organization,luring rural private lending funds to formal financial organizations by using formal financial governance mode to achieve the normalization of the management of loan funds,constructing the parasitic linkage relationship between private lending and formal financial organizations to let interest rate of private lending and loan term follow the pace of formal financial changes,effectively grafting rural private lending into the chain of rural civil mutual aid organizations by not only making the transition of rural private lending relationship to the endogenous network of civil mutual aid organizations but also making the semi governmental civil mutual aid organizations to gradually replace the rural private lending relationship,giving farmers more property rights to allow farmers to obtain loans secured by the property from the formal finance and allow the formal financial loans from the private sector to regain their own share of the loan,increasing the opening of private lending capital and giving the same investment rights as its formal financial capital,not only needing to encourage private lending capital to set up quasi formal finance organization mode to realize the standardization of private lending,also needing to allow private lending capital to holding formal financial organizations to achieve the normalization of private lending.(7)Based on the main conclusions,in order to fully play a driving role of rural private lending in economic development about agriculture,rural areas and peasantry,this paper puts forward some effective policies to optimize the development of rural private lending and improve rural financial market,so as to achieve the purpose of this study.