Study On The Problem Of Rural Finance Development And Rural Economy Growth In Gansu Province

Rural economy growth can not be separated from rural finance support. The rural finance system which adapts to rural economy growth, support and guide rural prosperous economy growth. In contrary, underdeveloped rural finance will restrict to the healthy development of rural economy. Judging from the current situation, in the China's most rural areas, there are "financial restraint" phenomena, which seriously restrict the development of rural economy. With the deepening reformation of rural economy, the contradiction between the supply and demand on rural finance services is more serious. Therefore, only lifting the rural finance restraint to promote development of rural economy and overall modern economy.Gansu Province is an underdeveloped agricultural province.so the development of rural economy is particularly important. In this paper, basing on actual data from 1988 to 2006, we use Granger causality test model and co integration to analyze quantitatively the causal relationship between rural finance development and economic growth in Gansu Province. The analysis showed that there are long-term balance between rural finance development and economic growth. Rural finance development is single Granger reasons for rural economy growth, for example, every 1% increase of rural finance development brought about 1.3215 percent of rural economy growth. Contracting agricultural loans, every 1% loans increase of township enterprises brought about 0.526 percent of rural economy growth, then every one percent increase of rural finance development made -0.446 percent of rural economy growth. This illuminates that Gansu Province's rural finance development is of great significance for rural economic growth.On the basis of these positive results, the paper separately from the perspective of demand and supply, using the positive research method to analyze the current status of rural finance demand and supply in Gansu Province. These showed that farmers'demand rate for funds was 77 percent, rural enterprises were 69.9 percent, and both are common. But the satisfaction is relatively low, 33.58 percent for farmers, 15.06 percent for rural enterprises from the perspective of demand. From the supply point of view, the Agricultural Development Bank of China is more and more limited on supporting agriculture, supporting agriculture business of Agricultural Bank of China also shrink year by year. The proportion of agricultural loans by the end was reduced form 19.33 percent in 1996 to 4.03 percent in 2006. Rural credit cooperatives were almost the sole provider on rural formal finance loans, but there are also many problems. Since the 1978-2006, capital outflow reached 5.7 billion Yuan. In 2006, high non-performing and bad loans which were categorized by 4 was 18 percent, the proportion will surpass 50 percent by category 5.In recent years, some new rural finance organizations such as town bank, financial mutual supporting association started trying, but there is still uncertainty. Small pledge-Lending business on postal savings also has just begun. The rural formal finance can not meet market demand for funds in Gansu Province, which left room for rural non-formal financial activities. The survey told that 72.8% of rural households and 69.9% of township enterprises have been non-formal financial loans, of which 90% of the loans took on between relatives and friends. Although the rural non-formal finance operations are not standardized, it has played an important role in rural finance markets in Gansu ProvinceOn the basis of results, the thesis puts forward the following countermeasures:①deepening the reformation of rural credit cooperatives, reconstructing rural cooperative finance system;②strengthening policy support, clarifying and strengthening the role of agricultural financial policies further;③guiding development of the non-formal finances, playing their special role on agriculture fully;④encouraging the establishment of various forms of financial institutions in line with the development of rural economy actively;⑤promoting innovation of rural finance system.