Risk Impact, Social Capital And The Farmers Credit Constraints

Rural finance is the core driving force of economic development in rural areas, the scale of the rural financial system to support efforts directly affects the level of efficiency of agricultural production and output. Since the reforming and opening in China the rural credit system already has great development, however, the rural financial market is still far behind from the Western developed countries. It is difficult for farmers to loan from the credit markets, and the fund support of agricultural production is extremely limited, then which makes a serious shortage of rural credit funds to become one of the main performance of China’s rural financial market imperfections. So the level of agricultural production can’t be improved, and the rural economy can’t be developed. The rural farmers have difficulty in obtaining loans, then solving the shortage of rural credit funds, deepening the reform of the rural financial system has become the most important issue to be faced and solved now.This study got some revelation reviewed from the domestic and foreign related literature. In the theory framework of information asymmetry and transaction costs, this study analyzes the features of the rural credit market, and then points out that the important factors that would influence farmer credit constraint should include the risk, the social capital, the entrepreneurial ability and the fanner household individual features. On this basic the paper presents farmer credit constraint hypothesis. Meanwhile it determines investigation with simple random sampling method.992effective questionnaires are obtained and then statistical analysis of the data is carried out. Then the paper testes formal credit, non-formal credit constraint and the factors by using Logistic Regression Model.The research indicates that farmers are suffering from the formal credit and non-formal credit constrain, the reason of emerging the formal credit and non-formal credit constrain is information asymmetry and the low income level of farmers. The social capital, the entrepreneurial ability and non-agriculture level, income level, the cultivated has a positive impact on the formal credit and non-formal credit constrain. The market risk significantly affect the formal credit constrain, meanwhile the nature risk significantly affect the formal credit constrain. According the conclusion of this research, the study further proposes corresponding suggestions to solve rural credit constrain. Such as:increasing the type and form of mortgage collateral, establishing effective agriculture insurance, improving the income level of the farmers...