The Research On Choice Of Rural Nongovernmental Finance's Development Path

The existence of nongovernmental finance in countries around the world is universal, due to the specific environment is different, it is unique. China's rural areas are prevalent in the supply of financial restraint, it does not effectively meet the demand for funds of the main rural economy, nongovernmental finance becomes the inevitable choice. Nongovernmental finance eases the financial shortage in rural areas and promotes rural economic development. It has played an important part in financial innovation and structural reform, provided new experience and ideas, this will help improve efficiency in the use of funds. In addition, the development of rural nongovernmental finance helps strengthen civil society awareness of credit and improvement of the credit environment. The establishment of nongovernmental finance bases on trust in non-financial system, with dispersion, blindness, without norms, complexity of operational forms decides its activities and acts to have a probability to be gray, may have a greater financial risks, and increases factors which make the community unstable. However, nongovernmental finance is not a scourge, it is due to the market economy, especially non-governmental economy needs more capital, it is an inevitable means. As the product of induced institutional changes, we can not ban nongovernmental finance, the key lies in how to manage and guide.In this paper, use of the new institutional economics, finance, agricultural economics and other relevant theory, first of all, defines the basic concept of nongovernmental finance, introduces the domestic and international research profile. It provides a summary of the operation of nongovernmental forms, explains the reasons of rapid development from different points of view. The paper points that the production and development of nongovernmental finance in rural finance is due to its unique advantages over formal finance and the formal financial system induced supply shortage,it is the result of system changes. The paper introduces the overview of nongovernmental finance,s development in Shandong province, using regression analysis to show the nongovernmental financing scale is affected by many factors. On this basis, the paper lists many factors that impact nongovernmental finance from different angles: the high interest rates, the missing of the legal status, the regional restrictions of personification transactions , local risk factors, particularly pays more attention to the high interest rates. In the analysis of causes of high interest rates, we get the basic understanding: the high interest rate of nongovernmental finance is a compensation of high-risk and opportunity cost, the scarcity of capital is also important,it is the result of free competition. The source is not nongovernmental finance itself, but the more risk than formal finance. Introducing the management experience of nongovernmental finance in the United States, Bangladesh, Taiwan's, despite the governance, management experience is varied, they have proven well that a country's economic development must not only rely on modern financial sector, traditional ,national and civil financial system is important , nongovernmental finance needs the recognition of civil society and more improvement measures relevant. On the basis of foreign-related management experience, combining features of the rural productive forces and the level of the rural financial needs, citing the five options of development path to rural nongovernmental finance: to standardize the nongovernmental normal financial activities, combat irregular financial activities of civil society, expand the scale of private financial institutions, establish appropriate community banks, private capital become shareholders of formal financial institutions. Finally this paper, taking into account the constraints, proposes building a civil external financial well-developed system of environmental recommendations: to create a fair legal environment, flexible regulatory framework and innovative deposit insurance system, a sound security system, low-cost credit environment.