Convergence Of Rural Micro-credit Repayment Mechanism Selection And Influence Factors Research In Shandong Province

“Improve rural financial service level and quality, Innovate rural financial products” isthe guiding ideology from Central Document NO1on the rural finance development issue.With the market-oriented and commercial operation trend of formal Rural Micro CreditInstitutions, the financial sustainable development topic has been hot spots.Micro Credit Repayment Mechanism is key points to balance Rural Micro CreditInstitutions’ financial sustainability and farmer’ credit demand. This paper evaluates selectionattitude matching degree towards Micro Credit Repayment Mechanism which between RuralMicro Credit Institution and farmer household, in order to optimize the Micro CreditRepayment Mechanism, to reduce the micro credit repayment default risk and enhancerepayment efficiency.On the theoretic research, this paper creates Micro Credit Repayment Mechanism fromfour aspects, the repayment supervising mechanism, repayment incentive mechanism,guarantee alternative mechanism, and repayment service mechanism, and analyzed theirdifferent effect on repayment efficiency.On the empirical research, this paper analyzes agriculture-related loans granting andrecovery amount situation, find that the loan recovery rate is not high and repayment situationis not optimistic in China. After comparison of the repayment default reasons viewpointsbetween Rural Micro Credit Institution and farmer household, interesting findings is that theRural Micro Credit Institutions hold views that farmers’ credit quality is the main reason ofloans default, however, in farmer households’ opinion, it is production risk and familyunknown risks(such as disease, disaster) cause credit default.This paper also discoveredShandong province’s financial data can explain the mainly situation in other area of chinathough the Group Crusting Model.This paper chooses394households,120RCC loan officers’ data in Shandong province,made convergence evaluation in rural Micro-credit repayment mechanism selection, whichboth from Rural Formal Micro credit institution and farmer households’ viewpoint. This paperconcludes that the Rural Formal Micro-credit institutions and farmer households’ selections in repayment incentive mechanism are highly convergent, their selections in repaymentsupervise, and guarantee alternative mechanism are lowly convergent. In repayment place,diversification of repayment channels choice, their selection is in concordance; however, inrepayment schedule, communication mechanism and fee design, their selections are different.The farmhouse’s participating rate in group guarantee loans is not as high as expect; they arecaution of providing guarantee of other people.Based on the results of selection convergence evaluation of Repayment mechanism, thispaper goes deep to analyze influencing factors of farm households’ participating in jointguarantee credit loans, and correlation factors of Rural Micro Credit Institutions’ guaranteemechanism decision. Makes conclusion that household’s credit conditions have a significantimpact on farmers’ participation in joint guarantee loan; Agricultural production and operationrisk factors is the main reason of rural micro credit institutions’ careful selection of mortgageloan. Rural Micro Credit Institutions lack trust of farmer households’ honest attitude in creditrepayment, and doubt their production and operational ability. Based on theoretical andempirical researches, this paper put forwards Micro Credit Repayment Mechanismsoptimizing paths, in order to perfect the Microfinance operation mechanisms and maximizeits effort.