Research On Rural Cooperative Finance Development Of China

In the rural financing activities, farmers and rural small and medium enterprises are the main demander of the rural credit. The rural credit has the following risks. First, agricultural production is cyclically, facing higher natural and market risks, investment in agriculture is relatively low yield. Second, the farmers production scale is small, geographically dispersed, the amount of funding the need is small and volatility, the economic and operating conditions of farmers and rural small and medium enterprises are opaque, lack of corporate financial statements and other easy-to-pass "hard" information. Third, the rural areas relatively have low level of capital stock, the demand for credit in rural areas lack effective collateral to support. Based on the characteristics of rural credit risk characteristics and their own economies of scale, modern formal commercial institutions have been reluctant to get involved in rural credit markets. The rural credit cooperatives have been the main force of rural credit supply, which has played a pivotal role in rural credit markets.Since the deepening reform of the rural credit cooperatives in2003, rural credit cooperatives’self-development ability has continued to improve. However, its financial strength, corporate governance, internal management, risk control, business innovation and talent reserves are still have a big gap with commercial banks. At the same time of the rural credit cooperatives’continuing improvement, a lot of rural credit cooperatives of which have good operating conditions are orderly restructuring to rural cooperative bank or rural commercial banks. Researchers fear that the rural credit cooperatives as the only formal cooperative financial institutions will be gradually commercialized.In2006, China began a new round of rural financial system reform. The establishment of new rural financial institutions is the mark of this reform, by relaxing the restrictions on the kinds of capital of which flow into the rural financial market, by encouraging all kinds of capital to set up village banks, lending companies and rural mutual credit union in the countryside. These three new rural financial institutions, only rural mutual credit union has the nature of Cooperative financial characteristics. During the commercialization reform of rural credit cooperatives, mutual credit union brings the hope for the continued development of China’s rural cooperative finance.In effect, the number of rural credit cooperatives have drop from19348to2646during the four years from2006to2010, the total number of rural mutual credit union experience a slow growth from8to37during the four years from2006to2010. Such a great contrast could not help worrying formal co-operation of China’s rural financial system in rural areas will be gradually marginalized or even disappear, and whether the commercial financial assume the heavy responsibility of rural finance.Therefore, this article would like to analysis the ability of the rural cooperative financial institutions to effectively improve the financing conditions in rural areas, and compare its credit supply efficiency advantages with other commercial financial institutions. According to the relevant conclusions, we can analysis the reform path selection of China’s rural cooperative financial system, and make relevant policy advice.This article is divided into six parts. The first part describes the background and significance of the topics, the paper’s analytical framework, research methods, the possible innovations and deficiencies. The second part of this article include the basic theory required, summed up the domestic and foreign scholars’research dynamic in the field of cooperative financial. The third part is an overview of the cooperative financial system, on Germany, France, Japan, and USA, and have a brief review of the four countries’ rural cooperative financial development process from the relevant laws of the cooperative financial system construction, cooperative financial institutions in their own capacity-building, cooperation in the financial industry self-regulation organization system and its functions, as well as government regulatory policy.Through a comprehensive summary of the successful experience of the national rural cooperative finance, we can drawing on China’s development of rural cooperative financial. The fourth part is an overview of the development process of China’s rural cooperative finance, and briefly reviewed the development status of China’s rural cooperative finance, summarizes the existing problems in China’s rural cooperative finance development. The fifth part, first we classified China’s rural financial system into large financial institutions and small and medium-sized rural financial institutions, compare the efficiency of the supply of rural credit of these two types of financial institutions, second we classified small and medium-sized financial institutions in rural areas in cooperative financial institutions and commercial financial institutions and compare the efficiency of these two types of financial institutions in rural credit supply. Finally, according to the results of rural credit supply efficiency of these categories of financial institutions, we analysis the selection of the reform path of the rural cooperative finance system. Part Ⅵ includes the conclusions and policy recommendations. The basic conclusions obtained through the analysis of the full text of this paper, and put forward policy proposals to deepen the financial reform of China’s cooperation on this basis.