Research On Farmers’ Borrowing And Lending Behavior In The Segmented Credit Market

Solving the problem of "Agriculture. Peasant. Rural-areas" is the key to deal with the "dual economic structure" of China. As the lifeblood of modem economic development, finance is responsible for helping the industry to support agriculture, the country to enter the capital in rural areas, and it is an important channel to ease the demand gaps in rural funds. From the angel of rural economic reform in China, it does not achieve the desired effect. Rural finance has not been the "booster" for rural economic development, but has become "pumps" in the rural economy. Rural financial institutions enter rural economy and absorb a large number of rural savings to invest industrial and commercial enterprises in the city,but farmers can hardly meet their requirements for get loans as a result of financial enterprises’ profit-driven and high threshold. The nature of the rural economy is cyclical, risky, and with low income, so it is not usually chosen by financial institutions. Farmers’ credit constraints have not been fundamentally resolved, and the loan funds are not really used in the development of rural economy, so that rural capital demand gap is further increased.Under the background, this paper analyzes the current causes of the rural financial and credit market structure and farmers’ choice of behavior from the following aspects.From the perspective of supply and demand in rural financial credit market, the paper analyzes rural financial supply under the condition of government-led, as well as the birth and causes of dual structure model (formal financial and non-formal financial). From the perspective of demand, it analyzes three dimensional structure of rural financial credit market——relatives borrowing, informal finance, formal financial. It comes to the conclusion that the segmentation of rural credit market is the result of government-led supply and farmer needs, and different lending channels are complements for each other.Secondly, in the segmented credit markets, it analyzes farmers’ decision-making behavior for credit, and how it is influenced by farmers household characteristics, production characteristics, income characteristics, age of the head of household, social relational networks, and other factors.Combined with46questionnaires of farmers in Guizhou J Village, empirical research on the farmers’ credit practices is given.Finally, the paper gives out policy suggestions for resolving the credit market segmentation of China’s rural from the revelation of new agricultural organization of " company+farmer"."Grassroots" nature of China’s rural finance determines that financial organizations can not really play the role as boost of economic development unless it enters into rural economic entities, or the financial organizations are bred by rural economy itself. While, it is difficult to achieve the desired results if it is increasingly divorced from the rural economy.