Research On China's Credit Rationing Problem And Policy Suggestion

The problem of"rural economy, rural development and rural demography"is a big problem which our government concerns mostly about in the process of economy development and economic reform, furthermore, the development of rural economy could not develop without financial support .china have developed a multi-layered financial system which covers most areas in the countryside, but there is still some problems in rural credit.Some scholars say, one of the most important factors that restrict rural development and the improvement of farmers'income is the shortage of financial institutions. The problem that farmers could not get credit from banks and countryside has a big rural capital outflow shows market failure in the rural financial market. The shortage of money supply is the key factor that restricts rural development and the improvement of farmers'income, therefore doing research on this problem has important meaning the rural construction in socialist country.Many western scholars do research in different way, and have academy's success. In the early 1900s, western scholars notice the problem that in the credit market, some people could not get credit from banks when he can pay interests and they call it"credit rationing". This phenomenon happens in the financial market of most rural areas in china. the main cause is the information Asymmetry in rural credit market, at the same time, most farmers lack proper guaranty and our credit system is not fully developed ,loan transaction which is suitable to countryside such as small loan to groups have not been spread in most areas.The paper which is on the base of"credit rationing"theory, using information economics and rural financial theory, analyzes china's credit rationing problem. We analyze the problem from combination of microcosm and macrocosm, theory and data external experience. We analyze china's credit rationing problem thoroughly and give suggestions on solving this problem. The key point of this paper is how to increase finance supply in the rural area.