Study On Rural Credit Guarantee System

The prosperity and development of rural area play a significant role in the Chineseharmony and stability. The issue of the "three-agriculture" is still the focus of our county andour party. Make half of the agricultural population of1.3billion people improve theirincome and living level is an essential prerequisite for realizing Chinese modernization. Ruraleconomy develops without the great support of the credit funds. Demand for financialservices in rural areas in China is becoming bigger and bigger, but the financial servicesinstitutions in our country can not cover all the rural area. Therefore, there is seriousimbalance between supply and demand, and the peasants’ various needs of capital can notadequately be satisfied. The main reason causing this phenomenon is the informationasymmetry among financial institution, peasants and enterprises. Credit rationing is seriousbecause the rural situation is complicated and the cost of information survey is relative high.The most effective method to solve this problem is credit guarantee. That is to say, a creditguarantee system should be established in the countryside. Various guarantee creative modelswill supply the peasant or the middle-size or small enterprise with the guarantee through theguarantee system to meet the different levels needs to capital. The development of theguarantee has the positive effect on decreasing the bank credit risk and solving theagricultural loan. This thesis firstly introduces the research achievements studied by experts athome or aboard on the rural credit guarantee, including the solutions solving the practicalsituation, which mainly introduce information asymmetry and the risk transfer and anotherrelevant theories as the theoretical basis for the rural credit guarantee. Secondly, the thesisillustrates the current situation of rural credit guarantee system at home, descries the functionsand the features of the credit guarantee system. At the same time, points out someshortcomings about the domestic rural credit guarantee system. Thirdly, Game theory is usedto analysis the effectiveness of the rural credit guarantee system. The rural loan of theincomplete information under the unsecured loan status and the complete information underthe secured loan are analyzed. The involvement of the credit guarantee can maintain theinformation fluency between the peasant households and the financial institution. The risk of the bank can be reduced and the peasants’ needs to get capital can be satisfied. Then, thethesis introduces the experience on domestic or oversee rural credit guarantee, and putsforward some suggestions based on different nations advanced experience. The thesisindicates that supportive policy, the sound system of risk diversification, farmers’quality-oriented education and the innovation on credit guarantee are the guarantee forsuccess. Lastly, the thesis states that it should be establish and perfect a multi-dimensionalcredit guarantee system, encourage the policy based, interdependent and commercial creditguarantee to establish. In addition, it should build a rural credit guarantee system whichsupply is widespread, dominated by policy, and take the commercial as the supplement. Thissystem can be perfected through enlarging the scope of guaranty, building the capitalsupplement mechanism, improving the risk prevention mechanism, perfecting laws andregulations, and strengthening the integrity education in the countryside and so on.