Research On The Rural Households Financing In Underdeveloped Areas

Party and the government have always been concerned about households financing in underdeveloped areas. This problem has become a bottleneck in the economic and social development in rural areas. So we must resolve it as soon as possible. So, we must establish and improve the rural financial system, smooth the financing channels in rural areas and ensure that households financing can be met. This can make the rural economy develop rapidly.In theory, financing can be divided into two types: internal financing and external financing. Internal financing means households acquire funds by way of accumulating themselves in order to make up the shortage of funds for agricultural production or household consumption. Internal financing is a important form of financing which make households survival and development. It determines the size and efficiency of acquiring external financing. External financing means household absorbs some other economic entities'idle funds in some way and puts it into their production and life. Relative to internal financing, external financing are not subject to households'own accumulation, which has high efficiency and strong financial flexibility. But external financing must be paid high financial costs and returned on time. So it is possible to give households a high financial risk and even bankruptcies. External financing can be divided into direct financing channels and indirect financing channels. Direct financing means households acquire funds through capital markets, not the formal financial intermediaries, including private loans to friends and families, high-interest loans and financing to some voluntary lending cooperative. Indirect financing means households acquire funds though the formal financial intermediaries. The formal financial intermediaries absorb idle funds from society and then loan funds to households.On the base of realities of underdeveloped areas, this article assumes the amount of external financing is zero firstly, according to internal financing preference in underdeveloped areas. We analyze households'internal financing, such as channel, size, structure and use, etc, and summary various factors in internal financing. Then, we abandon the assumption and gradually close to the reality. We begin to analyze households'external financing and divide it into direct financing and indirect financing. In this paper, we choose Guizhou province as the typical underdeveloped example and select some villages to conduct a detailed analysis.This paper which is on the basis of field research in underdeveloped areas argues that the phenomenon of financing difficulty is a fact that the rural households enter a vicious circle: underdeveloped economic and financial led to a small commercial loan, a narrow financing channel, a small-scale, a large proportion of non-productive uses. In order to go out of the dilemmas, we should focus on the rural households themselves, increase their enthusiasm for internal financing and change the backward mode of production. Finally, with the help of external financing, we can completely change the economic structure and agricultural mode in underdeveloped areas and enter a positive interaction between economy and finance.