The Study On The Influencing Factors Of The Ability Of Farmer To Get Credit

In China, the issue of agriculture, farmer and rural area is playing a crucial rolein national economic development and modernization drive. The basic way to solvethe problem is to develop rural economy, which depends on the increase of farmers’income and agricultural industrialization. However, It’s seriously restricts thehousehold production and enthusiasm that the farmers can hardly get credit fundsfrom financial institution. All of this due to the farmers lack of collateral and seriousinformation asymmetry between financial institutions. Thus the research aboutinfluencing factors of the ability of farmers to get credit is becoming increasinglynecessary in increasing farmers’ income, improving rural financial level anddeveloping rural economy.Based on household credit theory, information asymmetry theory, credit rationingtheory and the financial repression and deepening theory, the paper analyzes andsummarizes the influencing factors of the ability for farmers to get credit. After thecomprehensive description of the theories, based on the data of farmers of a county inHunan province, some analysis results and hypothesis, the model is built to do theeconometric analysis by using SPSS.The main empirical results include that, for the first, Soft informationaffects the availability of farmers’ credit, and financial institutions utilize therelationship lending technology consciously or unconsciously while providing loansto farmers. The second, the Financial institutions consider the farmers’ oralcurrent income indifferently but prefer the analysis of farmers’ potential earningcapability and diversity with relevant information of peasant householdcharacteristics. The third, Financial institutions prefer to provide loans tonon-agriculture farmers. The fourth, Benchmark interest rate and floating rate lim itaffect the rural financial institutions’ initiative to provide loans to farmers.Finally, according to the results of the theoretical analysis and the empiricalanalysis, the paper proposes some questions on policy: farmers improve its own creditconditions to strengthen financing ability; financial institutions improve the creditsystem to increasing the credit supply; the government strength the construction ofinfrastructure of credit markets to optimize infrastructure. Doing this can we acquire awell financing circumstance and improve the ability of farmer to get credit.