Research On Rural Credit Under The Asymmetric Information

Issues concerning agriculture, countryside and farmers are the fundamental problems of our country's development. Currently, these problems are serious, and the reason for this problem is the shortage with the support of our finance in the countryside. Asymmetric information is an important reason for this shortage. The information of financial institutions are known as to publics, but the information of the farmers are kept as secret. Asymmetric information is a direct result of adverse selection and moral hazard. Rational financial institutions will implement credit rationing. Although it can mitigate adverse selection and moral hazard, but there are also many problems. So we need to develop new ideas. That is what I will do next.Asymmetric information brings the adverse selection and moral hazard, credit rationing cannot solve this problem, what's more, the efficiency of the fund from the financial institutions and the support to rural is deeply influential. Guard against the risk of adverse selection: the issue is at the identification of the risk level of farmers. We are going to set a relationship between risk of farmers and the fluctuation of the prices of agricultural products, in order to give a suggestion that we can identify the risk of farmers thought the fluctuation of the prices of agricultural products. Guard against the risk of moral hazard, firstly, we set a model of moral hazard using the method of game theory with no restraint mechanisms, and then we draw into the restraint mechanism. We found that after bring restraint mechanism in; we can alleviate the problem of moral hazard.To solve the asymmetric information in rural areas is a systems engineering. Through the analysis of guarding against the risk of adverse selection and moral hazard, we give the following advice: (1) Strengthen the concept of credit with farmers, establish a good social atmosphere of integrity (2) Increase the propaganda about the finance policy in rural; (3) Improve the organizations of mutual help system (4) Establish a sound credit rating system for farmers (5) Strengthen the management of financial institutions their own (6) Establish creditor protection system and enforcement of debt recovery system (7) Flesh out the platform for the sharing of information resources...