Study On The Rural Informal Finace's System Evolution And Performance Of China In The Period Of Rigime Transition

In the analytical framework of McKinnon-Shaw, the informalfinance is an ineffective financing arrangement, it is not importantwhether in mature market economies or developing countries. However,due to finance constraints and "dual finance" structure, the informalfinance plays an important role in practice in many developing countries.This paper focuses on the informal finance, and draws on the latestresearch results of informal finance in and out of China, bases on thetheory of System Changes and modem finance development, anddiscusses the evolution path of the informal finance in the regimetransition period in our country. At the same time, we compare the formaland informal finance's efficiency to the economic growth and thefarmer's income growth by the empirical methods, in order to verifywhether the informal finance is effective on financing. The main contentsand views of this paper are as follows:First, based on defining the conception of informal finance, thispaper analyses the character and the socio-economic efficiency of theinformal finance, and describes the developing status of our country'sinformal finance from the angle of its scale, interest rates and farmer'sdebit and credit.Second, based on the System Changes theory, this paper discusses the transition process of the rural informal finance, rural economy and thegovernment regulation, and the evolution path of organisational form ofthe informal finance.Third, based on the theory of the finance development, financerestrain and dual finance structure, we apply the survey information fromWenZhou branch centre of The People's Bank of China and the data fromrural static observation point of the Ministry of Agriculture, use DEAmodel and Panel Data model to compare the formal and informalfinance's efficiency to the economic growth and farmer's revenue growth.The conclusion is that informal finance is a more effective financingarrangement than formal finance in the area of countryside.Fourth, in view of the rural informal finance's development state,this paper points out that the results of the policies for informal financewhich have adopted by our government at present are not very good.Learning from the international experience, we put forward thesuggestions to guide and regulate the development of the rural informalfinance in China for the primary condition, key step and supportingmeasures.