A Study On The Sustainable Development Of China 's Villages And Towns

Village Banks was established in 2006 as a new type of rural financial institutions after China’s new rural financial incremental reform. Its major role was to "covering" and "activate" the rural financial market. By the time of June of 2015, the number of Village Banks had increased to 1270, The assets of Village Banks have also increasing rapidly. But if those Village Banks want to play a good role in "covering" and "activate" the rural financial system, they must guarantee the sustainable development of themselves.The sustainable development of Village Banks are faced with many problems at present, most of the village Banks are lacked of brand effect, They are faced with strong demand for loans but they have difficulties in absorbing deposits, and LDR is very high. At the same time, the potential risks of Village Banks are very high, such as credit risk, operational risk, liquidity risk and systemic risk. These problems seriously restricted the sustainable development of village Banks, and they must be solved.The first part of this article introduced the background and development of Village Banks as well as the present situation of Village Banks, elaborated the related rural financial theory and the theory of the sustainable development of Village Banks. In order to explore the problems, this article make SWOT analysis for the Village Banks in the process of development, forming a comprehensive understanding on Village Banks.Then, based on reality, this article analyzed two successful cases of microfinance which including one domestic case and another foreign case. The foreign case which was selected is Grameen bank in Bangladesh, the Grameen bank in Bangladesh model is universally recognized as the most successful model in microfinance field, in this article, through the analysis of the Grameen bank,we hope to inspire the domestic microfinance to learn something from it. And the domestic cases which was selected is "Rong Xing" Village Banks that are mainly set up by the Harbin bank, after several years of development, "Rong Xing" Village Banks have make a figure in the rural banking industry, this paper analyzed the operation mode of "Rong Xing" Village Banks based on the reality of China’s rural conditions, summarized its characteristics and shortcomings, hoping to make it a reference for other Village Banks.According to the analysis and summary of microfinance mode above, in chapter 5, this article try to put forward the guarantee mechanism in four aspects, including the initiating system, microfinance technology innovation and risk management, and list the current practice of advanced experience, expecting to provide reasonable suggestion for sustainable development of Village Banks. The last chapter of the article is summary for the whole text.