Research On The Vertical Coupling Of Credit Supply Of Rural Financial Institutions In Heilongjiang Province

The rural financial system consists of rural formal finance and informalfinance. However, rural formal finance of Heilongjiang Province tends tocommercial operations, merging distribution branches in rural areas. Becauserural formal finance exist the phenomena of information asymmetry and farmersas well as rural SMEs are lacking in the necessary collateral, which are farexcluded from the service of the formal finance in rural areas, in the meanwhile,capital availability is low. Rural formal finance can not meet the normal fundingneeds of rural households and SMEs, which lefts a lot of room for growth toinformal finance (private finance, grass-roots finance). The development of therural informal finance is very active in the vast rural areas, because the ruralinformal finance is emerged and plays an invaluable role in the development ofrural formal finance, which is formed a forced phenomenon, and rural formal andinformal finance form two competing forces. Facing the chaos and imbalancesituation of the rural finance, Heilongjiang Province urgently needs to find a newsupply of rural finance model to better promote the development of ruraleconomy in Heilongjiang Province.Through the analysis of credit supply of the rural formal finance andinformal finance in Heilongjiang Province, it is of great important to seek a newsupply of rural finance model to meet the diverse needs of rural finance is veryessencial. The results show that the scholars at home and abroad think: thevertical coupling mode can expand rural credit supply. According to this idea,credit supply of the rural formal finance and informal finance in HeilongjiangProvince were analyzed separately from qualitative and quantitative empiricalaspects. First, the advantages and disadvantages of rural formal finance and informal finance in Heilongjiang Province were detailed comparative analysis ofstrengths and weaknesses of the rural credit supply, and a complementaryrelationship was existed. Rural formal finance and rural informal finance joinedup vertically, as a way to increase the supply of rural finance, and to reconcile thecontradiction between supply and demand. Then, through using Eviews software,regression analysis of the rural credit supply of rural areas in HeilongjiangProvince was conducted, and the comparison references variable were joined. Atlast, it is confirmed that rural credit supply in rural formal finance and informalfinance was not disappear long, but the coordinated development of therelationship. So the credit supply of rural formal finance and informal financevertically linked up, but the effectiveness was significantly larger than thecomparative variable. And the two complementary advantages increase ruralcredit supply in Heilongjiang Province.Through vertical coupling mode of cooperation, the credit supply of ruralfinance was expanded in rural areas of Heilongjiang Province. Combined withthe actual situation of rural finance in Heilongjiang province, three specificconnection mode were proposed, a detailed analysis of how to join, and theempirical analysis. Finally, from the level of goverment and financial institutions,the specific implementation suggestions were given for better implementation ofthe connection mode.