Mode Selection Of Folk Finance Normalization In Our Country And The Efficiency Evaluation

More and more financing requirements emerged following with the development ofeconomy. Most folk financing are often little-amount and dispersive, formal financecan’t provide sufficient financing service because of a series of strict procedure. Insuch case, informal finance come to the fore. Informal finance has advantages ofprocedure, information and region, so it can cover the shortage of formal finance, andis beneficial to the development of economy. So, the meaning of folk finance shouldbe adjusted, according to the present stage, and based on the old viewpoint of ourresearcher, the finance form which remedies the shortage of formal finance should beall called folk finance.In recent years, informal finance is not confined to the form of informal credit, formalorganization like rural bank are established. Such formal organization is not onlyreserve the former advantages of folk financing, but also improve the efficiency, itwould be a very important trend of development in the future. So it is very meaningfulto study the subject of folk finance normalization.This text makes a systematical explanation for folk finance at first, illuminated theconcept of it, the relationship of folk finance and other forms, make a very clearsummarization for folk finance. Then the effect of folk finance and the necessity ofnormalization are clear illustrated; the selection of normalization form and route aredemonstrated. At last, this text takes rural banks as an example, divide the efficiencyof normalization as two parts—internal efficiency and social efficiency, use DEAmodel method to evaluate the extend of folk finance normalization. Discovered theefficiency and some problem which need to be improved, show a clear way for thedevelopment of folk finance normalization in the future.