Study Of Formal Farmers’ Credit Constraints And Its Effect On Peasant Household Welfare

China’s agricultural production scale is not large, the management level is not high, the risk in agriculture is high, farmers are difficult to realize themselves to maximize the profit. Many farmers need to apply for loans from financial institutions. Financial institutions are difficult to fully satisfy farmers’credit demand in order to reduce the risk and realize the profit, which causes credit constraints.In order to calculate the true degree of credit constraints of sample area, along with the causes of farmers’ credit constraints and the influence of credit constraints of farmers benefits, this article use questionnaire investigation and interview method, using 834 sample areas in Liaoning province to calculation sample restraint of peasant household credit, using Heckman two-phase model to research credit constraints affecting factors, and finally using MLR model to analysis the influence of the credit constraints to peasant household welfare.In this paper, the first chapter introduces the research background and the status, which leads to the research question and possible innovation and deficiency of this study. The second chapter mainly introduces the theory of farmers’ credit constraints and relevant definitions. Then, according to the type of business, income level and scale classification, it analysis the farmer credit constraints degree, the results showed that the farmer credit constraint degree is 21.64% in the sample area, credit reject ratio is 13.85%. Those land management scale under 20 mu, middle-income, pure agricultural farmers are the most lack of capital. Then, using Heckman two-phase model to analysis the influence factors of credit constraints of high medium and low income level of farmers, Heckman two-phase model can effectively reduce the effect of selective. The measurement results show that higher non-agricultural income, productive assets value and home values, along with clear loans, relationship in government are lower in credit constraints amount.In order to measure the real influence of farmer credit constraints to the peasant household welfare, the fourth chapter used the MLR method to analysis. Measurement results show that credit constraints increase per 1 yuan, farmers’income reduced 1.75 yuan. Among them, farmers’land scale of operation in more than 100 mu, income is high, non-agricultural mainly engaged in other farmers welfare loss effect is more apparent, credit constraints increase per 1 yuan, farmers’ welfare will reduce 2.87 yuan,1.99 yuan and 1.99 yuan respectively. According to research conclusions, this paper puts forward the corresponding countermeasures:(1) government need to further promote rural assets mortgage; (2) the innovation of financial institutions credit management mode, implement the credit classification management; (3) tap rural credit resources, the innovation of credit product; (4) expand the farmer credit demand, improve the ability of peasant household credit; (5) the establishment of rural credit system.