| Village bank is an innovative solution to the problem of "financial repression", such as the low banking industry coverage of financial network in rural area, financial shortage, the insufficient competition, and the absence of financial service. To improve the repayment rate of village banks is of critical importance to achieve its goal of "agriculture supporting" and its sustainable development. On the one hand, the improvement of repayment rate creates condition for the village banks to reduce the require interest rates for the borrowers. On the other hand, the improvement of repayment rate can help village banks to reduce dependence on subsidies and to realize sustainable development, thus can raise more capital from the outside and cover more of the poor population. While a perfect credit repayment incentive mechanism can improve repayment rate efficiently, hence the repayment incentive mechanism of China’s village banks has been studied.Based on the current situation of China’s village bank development, this paper first analyzes the characteristics of China’s village banks and their implementation of "double target". Then the current village banks’repayment problems of incentive mechanism and China’s innovation demand on village banks repayment mechanism are analyzed from the perspective of Institutional Economics. After that, the dynamic incentive game models of repayment on personal liability loan pattern and group lending pattern are established respectively, and a comparative analysis on the incentive arrangement effect between two kinds of loan credit has been done. According to the results of previous, the following policy suggestions for China’s village banks on repayment incentive mechanism have been put forward:firstly, to strengthen the construction of social credit management system, secondly, to strengthen the innovation of village banks’credit products and credit pattern, thirdly, to strengthen the reward and punishment mechanism construction of village banks for the borrowers, and fourthly, to strengthen the construction of service platform and to realize the socialization of supervision. Finally, the conclusions of this paper are summarized and the future research directions are pointed out.The innovation of this paper includes:firstly, the China’s innovation demand on village banks repayment mechanism has been analyzed by the method of Institutional Economics. Secondly, the dynamic incentive game models of repayment on personal liability loan pattern and group lending pattern have been established respectively, and a comparative analysis on the incentive arrangement effect under different circumstances has been done. Thirdly, some policy suggestions for China’s village banks on repayment incentive mechanism have been put forward. |
