Rural Financial Cooperative Institutions Performance Analysis

In china, rural financial cooperative institutions are burgeoning rural cooperative financial organizations. Since two thousand years, the institutions have developed in vast rural area of China and played an important role for meeting the financial needs of farmers. However, the institutions encounters many difficulties such as self-financing, lack of expertise and lack of training .Those have hindered its development and growth fatherly, so the institutions could not provide enough funds to farmers for production and life. This paper will research and analyze the main factors affecting the performance of the institutions in order to promote their healthy development.The research methods include qualitative analysis, empirical analysis and case analysis. The paper has estimated institutions loans performance to promote farmers income growth with regression model. This method is innovation of this paper. Firstly, this paper describes the type of organization, financing and operations and analyses organizational structure, operational mechanisms and financial difficulties in FengXiang financial cooperative institution of Lishu county; Secondly, according to the actual investigation of farmers in Lishu county, the paper uses regression model to measure the performance of the institution loans; Finally, this paper analyzes the factors which affect rural financial cooperative institutions performance through investigating cases, and table proposals for the successful development of rural financial cooperative institutions.The paper concludes as follows:Firstly, in small rural communities within the geographical scope, the rural financial cooperative institutions runs at the basis of membership information symmetry each others .The lower transaction costs and lenders honest guarantee the rural financial cooperative institutions operating smoothly.Secondly, the rural financial cooperative institutions shares mainly consist of two kinds of capital stock. The different shares have different rights.Thirdly, as a new-type rural financial institution, the birth of rural financial cooperative institutions promotes the diversification of rural financial markets, accelerates the healthy competition of rural financial institutions and eases the loan problems of farmers to a certain extent. However, because of the lack of funds and the limited scale, the emergence of the rural community can't afford to change the situation of insufficient supply of rural finance.Fourthly, an outstanding director with high prestige is the key of institutions development; obtaining financial license favors enlarging financial scale, while attaching to farmer cooperatives is harmful for institutions to attract wider members, and limits the long-term development of institutions.Fifthly, the rural financial cooperative institutions loans are positively correlated with net income of per person, and members'loans increase 1%, correspondingly, net income will increase 0.473398%.