The Empirical Study On The Profitability Of Chinese Village Bank

Chinese village bank, enriching the rural financial market and serving for the rural economy, is an important part of the new rural financial institutions and to be the one demanding deep development. The sustainable development of the village bank relates to the work arrangement of the new rural financial institution, to the construction of pluralistic rural financial system and to the propulsion of rural financial reform. Thus, there is no doubt an important realistic and academic significance of the study on the subject of the profitability of Chinese village bank.In process of Chinese socialism construction, issues concerning agriculture, countryside and farmers are the most important problem, which always draws the Party and the government’s high attention. With the development of the rural economy, the current rural financial demand is experiencing diverse changes, which the rural financial supply has obviously lagged behind. For many years, financial service proved to be the weakness of service system of socialization in rural areas, which has become a bottleneck of restricting economic development. The establishment of the village bank has brought more vitality to the rural financial system and contributed to the dealing with the shortage of financial supply. However, there are some problems at present in the established village banks, such as small-scale profits, the lack of credibility, less bank branches and so on. An effective way to better the rural financial service is to improve the profitability and the operation efficiency of the village bank.This article comes to a conclusion by analyzing the definition of the village bank:Chinese village bank is essentially the rural community bank. According to this essence of the village bank, this paper expounds the relevant knowledge of financial theories.With the beginning of analyzing the background of the establishment of Chinese village bank, the paper has described the overall state of the management and development of it and affirmed the remarkable achievements in the scale, the profitability and innovation measures in the past five years. Meanwhile, the paper emphatically summarizes the interior and the external influences of the village bank’s profitability based on the analysis of the deficiency of it.This paper is an empirical study of the factors influencing the profitability of the village bank with the multiple-linear regression method, using a sample of the finance data of Sichuan Yilong Huimin Village Bank, Minsheng Bank Village Bank and Construction Bank Village Bank in2009-2011.With the thorough analysis of the village bank’s profitability, this paper puts forward some advice and suggestions on enhancing the strength of itself and improving the external business environment in the end.