The Analysis Of Linkage Between Rural Banks And Non-formal Finance In Less Developed Regions

Since the rural credit is characteristic of short term and small amount, high frequency, no credit records, unsecured loan and high risk, the rural bank loan to small and medium-sized enterprises. And the rate of agricultural loan is low, which contrast to the purpose of policy. How to solve the problems of agricultural loans by mechanism design with incomplete information constraint to solve the farmers and miniature enterprise credit, that is fundamental for rural bank service to agriculture. This paper based on the status of town bank and non-formal finance of EnShi autonomous prefecture, using SWOT analysis to analyze the feasibility and necessity of establishing connection. And try to establish connection by mechanism design between rural bank and informal financial institutions, to resolve the problem of collecting information of agricultural loan, at the same time to upgrade management and scale of non-regular finance.EnShi autonomous prefecture is one of the western undeveloped areas. Based on the analysis of capital supply and demand in EnShi autonomous prefecture, it is suggest to connect rural bank and in--regular financial institutions, for the purpose of loans to farmers and small enterprise with 5-50 million loan line, contributing to local economic development and the building of a socialist new countryside.