Research On Factors Impacting The Formal Credit Ration To Farmers And The Transmitting Mechanism

Issues relating to agriculture,rural areas and rural people(?three rural issues?)are fundamental to China as they directly concern the country's stability and people's wellbeing.These issues are the biggest shortcoming of China's economic and social development.The farmer issue is the core of the ?three rural issues?.A large number of studies have shown that necessary external financial support is of great help to farmers in developing production and improving welfare.However,in developing countries including China,there is serious formal credit ration to farmers.At present,under the background of China's rural vitalization strategy,farmers' financing difficulties are more prominent.In the past 10 years,the formal credit supply of Chinese farmers has undergone great changes,which is highlighted by the increase of market supply entities,the improvement of bank internal departments and the increasing supply scale.This has not only alleviated the formal credit ration to farmers to a certain extent,but also created favorable conditions for further research on the formal credit ration to farmers from different perspectives.There are still some shortcomings in the study of formal credit ration to farmers,mainly as few analyses from the perspective of supply-side banking institutions.This paper attempts to make up for these shortcomings.The innovations of this paper can be summarized as ?new perspective,new variables,new data and new discoveries?.First,from the supply-side of the credit market,based on the construction of relevant theoretical models and research hypotheses,it not only directly analyzes the characteristics of screening farmers behavior of banks,but also deeply analyzes the behavior characteristics of loan managers and the related influence,which reveal the internal working mechanism of banks.Under the background of China's deepening supply-side structural reform,the significance of this study is more prominent.Second,the new variables such as the dynamic changes of formal credit ration to farmers,the dynamic changes of screening farmers behavior,the management characteristics of banks,the external credit environment,the government intervention behavior and the self-determination behavior of loan managers are accurately characterized.Third,the data used in this paper is first-hand collection or survey data,mainly from the credit management system of banks,field surveys of relevant personnel of banks and farmers,with wide data coverage,large sample size,objective and accurate.Fourth,this paper presents some research conclusions that have been ignored in the past papers.Based on literature review and practical observation,this paper extracts relevant research hypotheses and theoretical models,and uses the sample data of banking institutions,loan managers and farmer households to conduct empirical analysis,and finally proposes countermeasures and research outlook.This paper is divided into 7 chapters.Chapter 1 mainly clarifies the research background and relevant concepts.Chapter 2 is the review of theoretical and empirical literature.It mainly reviews the related theories of credit ration,joint liability loan,farmer economic behavior rationality and rural financial market and related empirical research,in order to establish the research starting point and foundation for the later analysis.Chapter 3 puts forward the research framework and logical main line of the influencing factors and transmitting mechanism of the formal credit ration to farmers based on the literature review and practice observation,and constructs the banking institution's farmer screening behavior model and the farmer's financing behavior model to analyze the transmitting mechanism theoretically,and uses the theory of joint liability loan to deeply analyze the transmitting mechanism.Chapter 4 to Chapter 6 are the empirical analysis part of this paper.Chapter 4 is an empirical analysis of the factors affecting the formal credit ration to farmers and the overall transmitting mechanism.The paper uses the sample data of banking institutions to verify the significant factors affecting the formal credit ration to farmers and the existence of the transmitting mechanism.Chapter 5 is the further verification analysis of the first transmitting link of the formal credit ration transmitting mechanism in this paper.It implements the empirical analysis using the sample data of loan managers.Chapter 6 is a further verification analysis of the second transmitting link of the formal credit ration transmitting mechanism to farmers in this paper.It carries out the empirical analysis using the sample data of farmers.Chapter 7 reviews the main research conclusions of this paper,and presents the suggestions and research prospects.This paper comprehensively uses the literature research method,the case study method,the theoretical research method,the empirical research method and the normative research method.In the empirical analysis,the binary PROBIT model,the IVPROBIT model and the multiple linear regression model are applied to analysis.The main conclusions are as follows:First,risk management ability,regional credit environment impact the farmers' loan demand behavior by changing the guarantee management and loan checking management of banks,and result in the degree changes in quantity ration,guarantee ration,risk ration,transaction cost ration,social capital ration,etc.,eventually the changes affect the amount of farmer loan supply of banks.The government intervention may mainly affect the formal credit ration to farmers by changing the guarantee management of banks.Second,the management behavior of loan managers to limit the members of the joint liability group to the same village is conducive to improving the structure and quality of loans,and thus promotes the continuous expansion of the loan scale.While the management behavior of relaxing the immediate family relations and age gap among the group members have accelerated the business development in the short term,however,they may worsen the quality of loans,and eventually led to the shrinking of loan scale.Further in-depth analysis found that there is a significant correlation between the comprehensive credit management ability of banks and some independent management behavior of loan managers.Third,in the process of selecting formal financing channel,many farmers are severely affected by credit ration,mainly in the form of guarantee ration,transaction cost ration,risk ration and quantity ration.Farmers' microfinance demand(less than or equal to 100,000 yuan)and large financing demand(more than 300,000 yuan)are more susceptible to credit ration,and a small number of rationed farmes can obtain financial support by seeking help from informal financing channels.Whether the farmer has a funding gap and whether prefer formal financing channel are mainly affected by factors such as farmer basic characteristics,business characteristics,financing facilities,social capital,etc.The following recommendations are further proposed:First,for banks in China.1.Strengthen scientific and refined management.2.Cultivate professional personnel through an effective mechanism.3.Select modes with a strong potential,such as joint liability loan mode,bank and government cooperation mode,the batch management mode and so on.4.Create a full coverage of product line with innovative loan guarantees.Second,for Chinese government departments and financial regulatory authorities.1.Strive to rectify the credit environment.2.Improve risk compensation system.3.Accelerate the construction of rural infrastructure and informatization.4.Strengthen the business philosophy of farmers.Third,for Chinese farmers.1.Improve the organization level of production and operation.2.Enhance the awareness of integrity.3.Take the initiative to use new rural governance resources.