Discussion On The Establishment And Management Of Financial Institution In Rural Community

The paper, made up of 5 chapters, can be regarded as three parts: the introduction and the 1st chapter is part I, which tells of the background and purpose of the selected topic, the research method of the paper, problems to be solved, originalities of the paper, community financial institutions and their development; the 2nd chapter is part II, which gives introduction and analysis of the cases of the financial institutions of the rural communities in Jilin Province, with the findings of investigation into the nongovernmental financing in Jilin province; the 3rd, 4th, 5th and the conclusion constitutes part III, introducing and discussing the features, the establishment route, business scope, operation mode and the supervision and support of the financial institutions in rural communities.Part I, i.e. introduction and the 1st chapter.The introduction tells of the background of the topic selection that due to cancellation and merger of a large number of financial points in the rural areas the supportive policies to the countryside by the state are severely weakened, the channels of rural investment and financing are narrowed and the nongovernmental loans of high rate of interest are overrun. The central government proclaims that capitals of all sorts are allowed to enter into the rural finance. The purpose of the topic selection is that by promoting the development of the financial institutions of rural communities the problems of insufficient rural credit funds and the difficulties in farmers'applying for loan and financing can be solved. Based on the theories of project management, finance, institutional economics, money and banking, and by applying a variety of methods of investigation, induction, enumeration, the paper deals with the establishment route, business scopes, operation modes, supervision of the financial institutions in rural communities as well as support to them.The 1st chapter of the overview of community financial institutions and their development is divided into 4 sections. The 1st section deals with the development and significance of financial institutions in rural communities. The community financial institutions in our country are at the experimental stage. Although credit cooperatives are all over urban and rural areas in our country, in terms of institution orientation, service domains, business scopes and operation modes, they do not fulfill their duties as financial institutions of rural communities in practice. To develop community financial institutions can help to constitute harmonious society, prevent financial risks, bring into effect the scientific development concept of human orientation, conduct proper flow of nongovernmental finances and further reforms of banking. The 2nd section gives reading of community financial institutions from two angles. The attributes of community financial institutions in our country are: modern commercial banks that have assets within 100 billion yuan RMB; established in the mode of stock system or cooperative shares system; profit seeking; business scope confined to a certain area, serving local community economy. The interpretation of community financial institutions in rural areas is: financial institutions located in all cities and countryside except megapoleis, medium cities, open special economic zones and economic zones are all defined as financial institutions in rural areas. The 3rd section dealing with the development and features of community financial institutions abroad mainly introduces the development and features of community banks in the United States. The 4th section talks about the status quo of the rural financial system in our country that the main body of rural finance is under the control of the state and the rural financial reform has not served the purpose fundamentally and that post savings absorb a lot of fund from the countryside, from which fund flows to big and medium cities.Part II, also the 2nd chapter.The 2nd chapter is case investigation and analysis of financial institutions in rural areas in Jilin province, which is developed in 3 sections. The 1st section is the investigation and analysis of the Baixin Farmers'Cooperative in Lishu county of Jilin province, giving a detailed introduction to basic conditions and practice there and analyzing revelation of its inventiveness, its successful experience and influence. The 2nd section is the investigation and analysis of the rural cooperative foundation of Jilin province, telling of its evolution and analyzing the main cause of its failure. The 3rd section is the investigation and analysis of nongovernmental financing in Jilin province, introducing its overall condition and deducing its advantages and disadvantages by analyzing its features and cause of survival.Part III, i.e. the 3rd, 4th and 5th chapters.Part III is the major part in this paper. The 3rd chapter talks about the features and establishment route of community financial institutions in rural areas, expounding its types and features and finally discuss its establishment route. This chapter is divided into 2 sections. The 1st section tells about types and features of community financial institutions in rural areas, which consists of 5 types: non-banking financial institutions, loan firms specialized in loaning, financing cooperative sponsored by community residents, agencies of negotiable securities and insurance, firms of pawnbroking and suretyship. The features of community financial institutions in rural areas are: set up within a certain area, serving"triagros"mainly; subjects of service scattered, small fund, relatively high operating costs; low character of clients, insufficient mortgage, unsymmetry with client information, capable of controlling the outflow of fund, broadening the channel of investment and financing of community residents. In the 2nd section two major establishment courses of community financial institutions in rural areas are introduced: new founded and reorganized. The new founded refers to the community financial institutions in rural areas initiated by strategic investors and intent investors; the reorganized refers to the community financial institutions founded by reorganizing local credit cooperatives in rural areas or postal saving institutions in some places capable of doing so. The paper suggests: the present laws and regulations should be amended and found community financial institutions in rural areas by establishing new ones or reorganizing old ones depending on different situations. The new and reorganized community financial institutions in rural areas handles commercial banking as its major business, mixed with minor or deputy businesses such as pawnbroking, suretyship, securities and insurance according to the financial needs of community. With the development of community economy, the financial needs will separate from each other, and special financial institutions will be founded accordingly.The 4th chapter is divided into 2 sections discussing the business scopes and operation modes of community financial institutions in rural areas respectively. The 1st section is the business scopes of community financial institutions in rural areas, introducing the business scopes of commercial banks, cooperative banks, credit cooperatives, village banks, loan firms, financing cooperatives in rural areas, and lastly bringing forth conception about the business scope of new community financial institutions in rural areas. The 2nd section of the operation modes of community financial institutions in rural areas is discussed in three points. The first point is the types of community financial institutions in rural areas, explaining why the various authorized types of community financial institutions can not be put into practice on full scale. The second point is about suggestions to the operation mode of new community financial institutions in rural areas with regard to business orientation, operation mechanism, interior management and improvement of corporation administration system. The third point is about the suggestions made to the admittance of various community financial institutions in rural areas with regard to the policy of admittance of community financial institutions in rural areas.The 5th chapter talks about the support and supervision of community financial institutions in rural areas, of which the first section of supportive measures raises supportive suggestions with reference to finance, taxation, rate of interest, and the second section of supervision measures offers suggestions concerning trade supervision, exterior supervision and interior control system.Finally in the conclusion, it is suggested that the establishment and mode of community financial institutions in rural areas should adopt different ways and techniques rather than one uniform way and mode nationally and that during the course of their establishment the policy of experiment before popularization should be adopted so that everything can go on steadily.