Empirical Study On The Problems Of Informal Financing Needs In Rural Ethnic Minority Areas

Economic development is inseparable from the financial support. However, as the current main channel of the financial, banking institutions are not well positioned to meet rural economic development needs of credit funds. Mainly in the way that the formal channels from which farmers obtain loans become less and less smooth. Therefore, how to seek ways to meet farmers’ demand for funds from the informal financial market is becoming increasingly important. In this paper, we take rural areas in the Linxia Hui Autonomous Prefecture for example, and select Dazhuang Village in Momigou Township and Yangzhuang Village in Diaoqi Township as the main survey areas. Firstly, we introduce the concept of informal financing, and analyze the development status and the reasons of that in China’s rural areas. In particular, we conduct a preliminary theoretical study on the informal financing problems of the ethnic minority areas. Secondly, we focuse on the description of the empirical research on this issue, that include the survey design, implementation and ways to deal with data analysis. Finally, according to the present situation of the informal financing development and the actual life of farmers in Linxia areas, and combined with the Islamic finance thought, we propose some recommendations on building of the informal financial system in this region. This paper argues that national identity, as well as income status of the farmers are the main factors to affect the financing needs of the local civil. So, it would have important significance to improve the local informal financing status and increase farmers’ income situation if we incorporate the two factors mentioned above into the construction of the informal financial system.