The Evaluation Of Rural Financial Organizations’Functional Efficiency In China

In recent years, rural finance has acquired substantial attention in the field of rural economical development. China is an agricultural country. The issues concerning agriculture, rural areas and the farmers play a significant role in the economic development of China. From2004to2013, the continuous nine years’"the first document" have focused on the issues relative to agriculture. It fully illustrates the importance of agricultural economy and the incumbency to solve the problems in this field. As is known to all, the development of rural finance plays a role of the first importance in the rural economy, and dominates the construction of new rural areas and the development of rural economy. It is determined by the augment of rural financial organizations’functional efficiency. Therefore, it is essential to evaluate the rural financial organizations’functional efficiency.Based on the rearrangement and analysis of financial functional theory, efficient market theory, the theory of management on the asset and debt of financial institutions, and Pareto optimum theory, this paper defines the meaning of rural financial organizations’functional efficiency. After the categorization of relative theories, the basic function evaluation system is constructed from the aspects of financial service supply and demand. At the same time, the allocation function evaluation system is formed based on its influential factors. Then, the extensive function evaluation system is built from the necessity to reduce credit risks and liquidity risks. From those systems, the values of basic function, core function and extensive function and the functional efficiency are calculated by ANP and COPRAS-G. The conclusions are that in comparison with the urban financial institutions, the basic functional efficiency of the rural financial organizations is only56.38%, the core functional efficiency is54.78%, the extensive functional efficiency is67.63%, and the functional efficiency is57.91%. In the end, this paper provides the recommendations on the augment of rural financial organizations’ functional efficiency for policy makers. In this paper, the rural financial functional efficiency is discussed so as to broaden the application of financial efficiency theory in rural finance field, and deepens the research on rural finance theory. The evaluation on the rural financial organizations’ functional efficiency provides a theoretical foundation and practical guidelines for the decision making on rural financial development.