On The Rural Financial System Under The Small-scale Peasant Economy

At present, the vast countryside of China is in the small-scale peasant economy. How to remedy the deficiency of small-scale peasant economy and give play to the advantage of small-scale peasant economy is prerequisite for building the new socialist countryside. Due to the failure of financial supports, the countryside is short of funds, and the rural financial system that can be suited to the small-scale peasant economy must be built to cope with the above problem. So it is necessary to establish our rural financial system in the contemporary conditions. As well, a multi-financial system should be founded, which is superior in numbers, small in scale and moderate in competition to provide efficient funds for the peasant, the farming and the countryside.This paper studies the features of the small-scale peasant economy especially the peasant's loan behavior. On the basis of the features that both the small-scale peasant economy and the peasant need funds, this paper analyzes the practical management of the rural credit cooperatives and puts forward that our rural finance is in short supply, for our rural regular finance is insufficient and the folk finance is lacking in support and protection from corresponding laws. It also probes into the research of the target and principles of the reformation of the rural banking system, the position of financial organizations and the rural banking interest rate, claims on the analysis of management cost of the rural credit cooperatives that the rural banking interest rate should be higher than that in the urban so as to attract much more funds and financial organizations to the rural, in order to set up the ideal multi-financial system of moderation in competition, and comes to the conclusion that higher banking interest rate can enhance the finance competition and it is sure to be fulfilled to reduce the rural banking interest rate while increase the rural financial supply.