Studies On The Borrowing Behavior Of Rural Households

The development of rural finance is the base of the development of rural economics. For the development of economy in country, the deficiency of capital is always the most important obstacle. The rural households are feeble in capital strength and have to obtain outside capital support because of the small dimension and decentralization of agriculture in China. The rural area also needs outside capital support because its development depends on agriculture, which characterizes long production period, low benefit and high risk.The financial support from outside of rural households includes borrowing from other rural households and financial organization, while the financial support from outside of rural area includes the continuous funds provided by the government. However, the current situation is that the rural area can't obtain funds from the normal financial channel and its internal capital is transferred to other fields. Therefore, the capital of rural households can't satisfy their life and production needs. This study analyzed the basic situation of the rural household's borrowing in Shandong province and the factors influencing borrowing scale, and further analyzed the two most important borrowing forms, financial organization borrowing and personal borrowing. Then we found out the various influence factors of them and finally discovered the key to the existing problems of rural household's borrowing.This paper is consisted of five parts. The second to the forth part are main body of this paper.The first part introduced the meaning of this study and the related review on this research field.In the second part, we first statistically analyzed the current situation of rural household's borrowing in Shandong province, and found that the range of borrowing is decreased with the increasing level of borrowing and personal borrowing and living borrowing are the two main borrowing. Then we found the rural households with different income present different characteristics in borrowing. Finally, we found that the income, the consumption payout and the original value of house in the end of one year influence the borrowing scale remarkably.In the third part, we analyzed the borrowing and loan behavior between households and financial organizations and between rural households using game model. The results showed that the main factors that influence the borrowing and loan behavior between households and financial organizations include the amount and rate of borrowing, the borrowing cost of households, the loan cost of financial organizations. The main factors that influence the borrowing and loan behavior between rural households includes the amount of borrowing, the use of the borrowing, the cost of lawsuit, the importance of good reputation and social relation.In the fourth part, through analysis of individual examples, we found the borrowing from other households, compared with the borrowing from financial organizations, characterizes the smaller amount, longer period and more purposes. Borrowing from relatives and friends are the first choice of households. The rural household's social relation not only affects their personal borrowing ability but also their borrowing ability from financial organizations. We also found that the coexisting of borrowing and lending is common for some rural households.The fifth part includes the conclusion and suggestions. The primary suggestions are as follows:The reinforcement of the financial legal and credit system construction, consummation of the mortgage mode, encouragement to establish financial organizations to support each other in households themselves and all kinds of other informal financial organizations.