The Empirical Research Of Financial Exclusion And Its Influential Factors In Jiangsu Rural Area

The frequently happened financial crisis in the late 20th century has urged most financial institutions to choose their financial service area more prudently. They abandon some of their service networks which are under great risk and low profit. On the other hand, they relocate their operating center in towns and cities. Thus there has been financial exclusion which target at vulnerable groups in many countries. In China, as the reform and opening up gets further, the same situation has happened. The rural credit cooperatives merge their services terminal in rural areas, and the state-owned banks also relocate their market position in cities. Many financial markets in rural areas lack of competition, and residents are suffered from severe financial exclusion. As a result, it is significant for economic and social development to study the influence and reason of financial exclusion in different areas, and search for solutions.On the basis of summarize the research status quo of both home and abroad, this paper first introduces the argument basis of financial exclusion-financial ethnics and its relevant theory. Then it analyzes the definition, influential mechanism, and evaluation method. Chapter 3 of this paper studies the chief characters and district discrepancies in Jiangsu rural areas, and reaches the following conclusion:in respect of financial institutions which supply agricultural credit, rural credit cooperatives undertake most of the supply of agricultural credit, and the proportion of agricultural credit in all sorts of credit is low. State-owned banks and share-holding commercial banks supply little financial products to Jiangsu rural areas. Thus the character of financial exclusion shows unitary and policy-based. The quantity of State-owned banks and share-holding commercial banks is far lower than average of Jiangsu province, both in the absolute number and proportion. The coverage rate of rural financial institutions is generally low. With regard to the district allocation, the relative number of rural financial networks is in severe lopsided. In respect of general trend, rural financial services take positive changes from 2007 to 2008, and farmers are more easily accessible to financial services.On the basis of absorbing the theoretical achievement of financial exclusion in both home and abroad, Chapter 4 of this paper analyzes the influential factors of financial exclusion in Jiangsu rural areas. It uses the total number of financial institutions and the total number of commercial banks as the explained variables, respectively, and constructs the influential factor model. The empirical results show that, for the total number of financial institutions, the number of rural practitioners, rural per capita net income, rural financial infrastructure and location variables, which denote the difference between Middle and North Jiangsu, play an important role, but the variable of industrial added value explains little. For the total number of commercial banks, industrial added value, rural per capita net income, rural financial infrastructure and location variables, which denote the difference between Middle and North Jiangsu, play an important role, but the number of rural practitioners explains little. It indicates that the allocation of Rural credit cooperatives and Postal saving banks is influenced by administrative intervention, while the allocation of commercial banks is dictated by market. In the conclusion, this paper put forward policy and suggestions for the purpose to reduce financial exclusion.