The Study Of The Influence Of Rural Non-formal Finance On Farmers’ Income Growth

Agriculture is the foundation of the national economy. The report to the 18 th National Congress of the Communist Party of China indicated that: Solving the problems about Agriculture, Rural areas and Peasantry is the priority of the party work. We should enhance the vitality of rural development, keep the construction of national infrastructure and the focus of the development of social undertakings on the rural areas, facilitate the farmers’ income, and maintain sustained and rapid growth of farmers’ income. The party and government are attaching great importance to the problem of increasing farmers’ income. Finance is the core of modern economy and has played a very important role to the rural economic development. But due to the limitation of the system and mechanism, formal finance has a serious shortage in rural areas, non-formal finance has far-reaching influence on both of rural economic development and farmers’ income increase. So the problems that how the non-formal finance influences rural economic development and farmers’ income growth, how deep the impact degree should be further researched.This article is divided into four parts: The first part is to make systematical investigation and in-depth analysis on domestic and foreign literature, which laid a foundation for study of this problem. The second part is to take into consideration the theoretical discussion of rural non-formal finance and farmers’ income growth, then to make in-depth analysis on the problems which existed in the development of rural non-formal finance and the factors of farmers’ income growth. And it gives the statistical description and the analysis about the reality both of rural non-formal finance and farmers’ income growth. All of the second part provides theoretical support for the later research. The third part is to make empirical analysis of rural informal financial impact on the farmers’ income growth, which based on relevant statistical data from 1995 to 2014. The vector auto regression model has been used. This paper selects the scale and resources allocation of rural non-formal finance as the independent variables, and the factor of rural labor transfer as the controlled variable. Finally, aiming at the existing problems of rural non-formal financial development, this paper put forward related policy suggestions to guide its healthy development.This study would show that: First, because rural formal finance supplies with grave deficiency, rural non-formal finance has a major impact to the development of rural economy and farmers’ income growth. But the scale which developed to a certain degree would inhibit farmers’ income growth. Secondly, in the short term, the increasing of the farmers’ income would promote the development of rural non-formal finance. The two accelerate each other. The innovation in this paper as following: In the methods’ selection, this paper applies VAR model which is one of the most easily used models for analysis and prediction of economic problems. In the variables’ selection, this paper selects the scale and resources allocation of rural non-formal finance as the independent variables, and the factor of rural labor transfer as the controlled variable. This article has the more comprehensive empirical analysis achievement.