The Research Of The Rural "Credit+Insurance"

The rural financial system needs strong credit capital support, but in rural areas, it is both difficult for farmers to loan from the banks and for credit institutions to lend money to farmers. This phenomenon is previously existed. The reason of this phenomenon is due to the farmers’lacking of proper credit collateral, which make the credit agencies fail to transfer the risks through collateral. In order to enhance the farmers’credit collateral and improve the farmers’lending ability,this paper fixes the rural "credit+insurance" as its main purpose. Through the introduction of the insurance products into the rural credit market, rhetorically speaking, it can effectively expand the farmers’loan collateral and transfer the default risk of the farmer in natural disasters and accidents to the insurance company. Therefore, the farmers’lending and reimbursement ability could be enhanced, and the credit agency’s credit risks could be reduced, so as to realize the rural credit allocation of resources "Pareto Improvement". The paper first analyzes the present situation of the rural credit market’s supply and demand. It finds that the rural credit market is in a low level of equilibrium and the farmers’demands of effective capital are not satisfied. The main reason is the structural vacancy of the sexual function caused by the formal financial institutions market positioning and the lacking of proper loan collateral as a result of high transaction costs for the credit agencies. This situation can be improved by providing enough loan collateral from the farmers. Then, the paper proves the feasibility of "credit+insurance". Through the method of game theory, under the situation of pledged insurance policy,the rural "credit+insurance" could increase the rural credit agencies’expected benefits, and reduce the credit risks. At the same time, with Edgeworth’s box chart, purchasing insurance can improve their factor endowments for these loaning farmers, so as to realize the rural credit resources " Pareto Improvement"; Our country’s existing laws and policies also support the feasibility of the rural " credit+insurance ". Later, based on the existing pilot situation analysis of "credit+insurance", it finds that although the rural "credit+insurance" in theory is fesible, actually there are still some real obstacles which includes the specific design operation of product and the insurance company’s business cost. Then, this paper makes some specific designs for the related products about "credit+insurance", and makes some researches to reduce the operated costs and risks of insurance company and expand deed cooperation between the rural credit agency and insurance company. At last, the paper puts forward relevant policy suggestions according to the situation of our country.