Research On The Relationship Between Informal Finance And Rural Economic Growth

The progress and growth of the economy has always been inseparable from the financial support.For the economy and society, especially the rural economy and society, informal finance have a very important influence and play a role, especially in the background of rural financial reform,so this research is necessary. whether study for the relationship between financial development and economic growth, or study from the microscopic and macroscopic directions, the relationship study has great value. Correct understanding of informal and rural economy and their financial relationship, will better improve the current financial system and financial markets, and better serve the rural and agricultural.This paper attempts to meticulously combine and describe the relationship between the two, detailing the production, development and the main form of informal financial, analyzing the current situation and experience of other developing countries. Study on the finance and rural economic growth of China’s informal and then from the point of view of theoretical and empirical analysis, reached the following conclusions: First, the emergence and existence of informal financial is universal. Second, informal finance in the rural financial market has more advantages than the formal financial. Third, informal finance plays the role of financial functions and to promote economic growth elements, realize the promotion for the rural economic growth. Informal finance and rural economic growth shows a two-way Granger Cause, and showing a positive correlation. Finally, according to the course of the the problems and realities, this paper makes relevant policies and recommendations.