A Study On The Credit Availability Of The Urban And Rural Household In China: How Important Is The “Relationship”

Chinese society has always been a "relationship" society, human, ideological and relations have a long history in China. The Circle of relationship withdrawals social credit between people, not only help to maintain the balance of social relations, but also safeguard and specification of personal life. As a traditional "relationship" society, "relationship" of our family-social capital, also have a significant impact on their lending practices(including informal lending and private lending).In this paper, the Southwest University of Finance and economics family financial investigation and Research Center in 2011 Chinese family financial investigation data(CHFS) was used from the perspective of social capital to study the household credit available, and the influence of the size of credit. In this paper, we will consider the social capital from two aspects: weak relationship capital and strong relationship capital, and use factor analysis to obtain the relationship between the weak capital indicators, then using Probit model and Tobit model to study the impact of social capital on the availability of urban and rural household credit, and the impact of social capital on the scale of urban and rural household credit. Finally, The Blinder-Oaxaca decomposition method is used for urban and rural household credit availability variance decomposition analysis.Results of this study showed that:(1) credit availability: weak relationship capital for urban and rural families have significant positive influence on bank loan availability, weak relationship capital act as a "bridge" role, by reducing information asymmetry and reduce transaction costs to increase credit availability. Strong relationship capital for urban families bank loan availability and urban and rural households have significant positive influence on folk loan availability, strong relationship capital to reduce the risk of moral hazard in the process of credit, the role of collateral increase credit availability.(2) the credit scale aspects: strong relationship capital on family folk borrowing and town bank loans have a significant positive impact, while bank loans for rural households did not significantly influence; Weak relationship capital on rural households folk borrowing bank lending and rural households has significant positive influence, the urban households do not have a significant impact.(3) the differences between urban and rural areas, urban and rural families more than 90% of the bank loan availability differences can be explained, Weak relationship capital of urban and rural family differences on bank loan availability strong explanation; Urban-rural differences of folk loan availability of 44%~52.5% can be made of the characteristics of the variable difference explanation, and do not explain partly accounts for 47.5% ~ 47.5%; Strong relationship between capital and reflect the family social position, weak relationship capital factors on urban and rural households folk loan availability differences with strong explanation.