Research On The Influence Of Rural Credit Cooperative Microfinance On Farmers' Income

With the rapid development of China's economy, the income discrepancy between farmers and citizens is dividing with accelerating speed, which has been paid a lot of attention. Since 2004, the national No.1 document has focused on the issue of "agriculture, rural area and farmers" for consecutively six years and attached great importance to solve this issue by financial means.As an institutional and technical arrangement, microfinance is regarded as an important tool for alleviating poverty. This conclusion has been tested in many foreign practices. Microfinance has been carried out in China for almost twenty years and has experienced NGO programs, policy microfinance programs for alleviating poverty by the government, Agricultural Bank of China and China's Agricultural Development Bank, formal financial institution's microfinance service (mainly rural credit cooperatives) and the diversified commercial microfinance businesses in recent years. On one hand, the microfinance mechanism of cooperatives has adopted selectively rational parts of traditional microfinance practice while designing the product also based on the reality in China's rural area with its own characteristics. On the other hand, the microfinance market is developing dramatically in China when more and more institutions are piloting or initiating microfinance products. As a result, it is necessary to assess the influence of cooperative microfinance on farmers'income so that we can provide practical evidence for the further development of microfinance in China.Based on the summary of prior research, this thesis firstly introduces rural finance theories and microfinance theories and then recalls the development of microfinance in China and analyzes the business of cooperative microfinance. Afterwards it analyzes the foreign microfinance technique and the working mechanism of cooperative microfinance. Using focus group discussion results, this thesis analyzes farmers'preference for the factors of microfinance product and based on this, it analyzes whether farmers are satisfied with cooperative microfinance service. Further, this thesis analyzes the development of microfinance in northern Jiangsu Province and Suqian City and afterwards it uses cross-sectional data from field survey of farmers in Sihong County and tests the influence of cooperative microfinance on farmers'income and explains how this influence works.Based on the summary of the contents above, this thesis draws conclusions as follows: with the diversified development of microfinance institutions, cooperative microfinance business faces stronger competition. At present, it keeps healthy and fast development and will maintain the leading position in China's microfinance realm in the long run. The lending card technology of cooperative can help enlarge the coverage of microfinance service, better satisfy the farmers'financial needs and offer long-term service for farmers. The advanced foreign microfinance technique has meaningful references for cooperative microfinance, such as the design and arrangement of installments and analysis of farmers' cash flow. The financial demand of China's farmers is gradually changing, with larger demand for amount and more consumption demand and most farmers express their satisfaction for cooperative microfinance. Cooperative microfinance has realized high level of coverage and to a large extent it has satisfied farmers'financial demand and targeted the relatively weak group of all the farmers. It has significant influence on farmers'income.