Reseacher On The Factors Affecting Farmers ’Households’ Demand For Credit

Both of the continual reform of rural market economy and development of diversified managements need financial supporting. However, on the one hand the general farmers’ income level is so low that they cannot meet the production and living needs by their own funds; on the other hand, although rural financial reform has achieved some initial results in recent years, but the problem of imbalance between demand and supply of rural financial markets still exist,(Zhang Yihong,2008), lack of funding in rural areas is a common phenomenon.Small peasant household is the basic unit of rural society, the financing situation of farmers is an important variable affecting rural economy. Through a review of previous studies, I know that, farmers with different regions and different levels of economic development and under different geographical and cultural, their needs of loan are different. This paper focus on the effecting factors of household loan demand, Select rural people in a town of Hunan province in central region (farmers of Shaoyang City, Gaochongshan Town) as the sample, I discussed deeply on the different types of production and economic needs of farmers and the actual borrowing of effective demand factors and the financial needs’ satisfaction. Maybe my conclusion can provide some operational policy references.According to the analysis of this paper, I drew the following conclusions:Generally, requirement of capital in rural areas is mainly small and short-time, so, if the interest rates are high in a certain range; the impact on rural household borrowing is not very large. Overall, the farmers who breed or plant something at a large extent and who are engaged in non-agricultural business need more findings relatively. Living demand of funds usually resort to interest-free loan in the form of civil solidarity, but medical issues’ requirement is met on the very low level. Productive use often resorts to interest-bearing loans. Farmers’ productive type, education background, income level and burden on the farmers’ labor have an important impact to borrowing intentions; productive type, education background, income level, social capital are important factors effecting the household credit demand. Borrowing and lending interest by comparing the effective demand, come to affect the borrowing capacity factors (household borrowing needs are not being met factors:do not have corresponding borrowing capacity) as income level, education, labor burden, social capital.The policy recommendations of this paper are:the government or related institutions should through the introduction of technology to make up for the constraints of education background, and help farmers choose their own income-generating income way. Borrowing needs of low-income people may need to establish some policy mechanism to address; only relying on commercial banks (including credit unions) cannot resolve it. High risks resulting in higher costs, to compensate for the risk, higher interest rates are reasonable and acceptable to farmers in an appropriate range. Farmers who plant or breed in large scale and engage in non-agricultural entrepreneurship have strong capital demand; the Government should pay attention to provide financial services to appropriate layout.