Study On The Operation Mechanism Innovation Of Mutual Aid Fund For Development At Village Level

Chinese national economic development, building a harmonious society as well as a well-off society is fundamentally confronted by the Three Agricultural Problems, which increasingly occupies an important position in the socio-economic and national security area. The main purpose is of it is to increase agricultural people’s income. Based on Asymmetric information and the like reason, the formal financial institutions choose to withdrawal from the rural areas so that agricultural people can not get money from this kind of institutions to support their agricultural production. Being lack of funds for agricultural production deeply constraints rural area’s development as well as agricultural people’s income. China has put large sums of anti-poverty funds to the poor rural areas; however, it turns out to be not effective. In order to alleviate the inadequacy of production funds and try to innovate financial funds investment. The State Council Office of Poverty Alleviation and the Ministry of Finance formulated new policies in May2006. From then on,28provinces, except Beijing, Tianjin and Shanghai, have launched the poor villages’mutual funds pilot project and9,003villages were covered till the end of2009. The new poverty alleviation mechanism plays an important role in improving efficiency of anti-poverty, meeting the financial needs of farmers in rural areas as well as promoting the integration of rural communities. Generally, the implementation of poor villages’mutual funds pilot is not ideal. However, the pilot program at Zhangyemiao Village in Yilong County, Sichuan Province not only serves farmers well but also makes them develop sustainably and healthily, successfully unifies the economic goals and reduces the poverty.This paper attempts to explore the operation mechanism of villages’mutual funds from an innovative perspective. In order to get detailed information, the author went to Zhangyemiao Village in May2012, and stayed there for a30days’field research. Non-structured interviews, questionnaires, participant observation were used during this period. Besides, the author referred to a lot of relevant data and literature. With the combination of quantitative and qualitative analysis, the author mainly studied three issues as below:Firstly, why could the villages’mutual funds pilot project in Zhangyemiao Village become successful? Secondly, how to effectively integrate the economic goals and poverty reduction goals? How to complete the control and prevent from credit risk. Therefore, the main structure of this article is released as follows: Chapter1is introduction, including research background, problems and significance, research framework, contents, research designation and innovations. Chapter2is literature review, including domestic ones’ and overseas’. Chapter3is the overview of the practice of mutual funds in China’s poverty-stricken villages, contains the connotation of the poor villages’ mutual funds, the current situation as well as the main difficulties in the process of development. Chapter4mainly discusses the mutual funds operation, performance and the main problems in Zhang yemiao Village. Chapter5mainly talks the mutual funds’ innovation in Zhang yemiao Village, which includes an operational mechanism innovation and the loan risk prevention mechanism innovation; Chapter6is conclusion and some problems for the further study.