Research On The Village Banks’Development

In order to perfect China’s rural financial system and improve the rural financial service level and promote the construction of the new model of socialist rural areas, in2006, CBRC(China Banking Regulatory Commission) issued a new policy on guiding civilian capital to participate in rural areas to fund village banks. After5years development village banks has acquired encourage improvement on the development of rural economics. Village banks, however, are newly emerging financial institution, there are some factors which can restrict and impact its development. Therefore, research on how to deal with these problems and how to realize the sustainable development of village banks is of extremely important significance.This article is based on current situation of village banks nationwide, to analyze the present problems and restricted factors of the development of the village banks. In the meantime, the paper learns some successful experience from several foreign micro-financial institutions of the operation, and then put forward some creative suggestions in the light of the actual economic environment in our rural districts in the last part. In the first place, expanding financial strength of the village banks, developing innovative services, strengthening talent construction and improving other management aspects are imperative to village banks’profitability. In the second place, market-oriented interest rate on village banks as financial reform pilot is an import step of our country’s financial reform, this try not only enhances the efficiency in funds use of village banks but also can mobilize sufficiently the positivity of all participant of village banks. Finally, some policy as financial policy, tax policy and so on should be defined in order to increase the business environment and lower the operating costs of village banks.