The Study On The Development Of Rural Cooperative Finance

Rural co-operative financial institution is an important force in China's economic and finance development. With the improvement of economy and the deepening of reform, the demands of funds have increased greatly, at the same time, the supply lagged a lot. So it is a big problem for the rural economic development in China. Now, because of the asymmetry information and pursuing higher return is the character of capital, formal financial institution can not accept the responsibility of facing the demands. The informal institution can not supply enough funds either, and it also needs a method to regulate the funds. Based on the current circumstance, with the formal institution as leading factor, using informal funds to build co-operative financial institution becomes more efficiency than other ways. So, there are very important practical and theoretical significant to make further research for rural co-operative financial institution.The paper firstly reviews the research findings and conclusions at home and abroad, In order to find the basement of co-operative institution, the paper uses Augment Dickey-Fuller test,Co-integration test and Granger causality test to illustrate the relationship between fund supply and economic development. At the same time, the paper studies the necessity and state quo of co-operative financial institution in China. Benefiting from the Game Theory, it also makes a theoretical model and analysis the possibility of building a co-operative financial institution in short time and its stability in long time. Through empirical and theoretical research, the paper gets the conclusion and proposes the policy suggestions that it should pay attention to the reality and different nature conditions, keep minds in the essence of the economic development, improve the legal system of supervising, and introduce the insurance mechanism to rural financial market.