Financial Institution Innovation In New Rural Construction

During the new historical period, to build a new countryside is the inevitable choice in our rural reform and development, and it is also the inherent request for the thorough application of the scientific outlook on the development and the construction of the structuring harmonious society. The key issue of building a new countryside is the sources of funds. It takes a long time and needs a huge amount of money to build the new countryside, and most of the newly added construction projects are quasi-public or private. Obviously, it is not practical nor reasonable if all of these construction projects are paid for by the central government. Therefore, improving rural financial system as soon as possible, giving full support to the conversion from traditional agriculture to modern agriculture and effectively activating the vast rural consumer market gives a more practical and urgent significance to the acceleration of the pace of building the new socialist countryside, strategic tasks of expanding domestic demand and promoting economic growth. In order to achieve above-mentioned objectives, we must regard the promotion of the rural financial innovation as the key part.The rural financial innovation refers to the functional differentiation and combination of rural financial services which aims at enriching the content of rural financial services, raising efficiency of rural financial services and giving full play to financial support for agriculture, based on the demands of rural economic development. It includes the innovation of rural financial system, products, management and service mechanism. Currently, the rural finance is still the weakest link of the entire financial system in China:the central government’s support to agriculture, rural areas and farmers has decreased obviously because of the commercial reforms in rural formal financial institutions; the existent financial system is not able to resolve the predicament of financing difficulties in rural areas and far from meeting the financial needs of building a new countryside. Hence, the government hopes to develop new financial elements in the rural markets in order to build a rural financial system with "endophytism".The object of study is the innovation of the rural financial institutions under the background of building a new countryside in China. In this thesis, the author aims at exploring innovative ideas in the rural finance by combining the construction of new countryside and rural financial innovation in the backdrop of building a new socialist countryside and proposing the policy recommendation that the innovation of rural financial institutions is supporting the construction of new countryside.The theoretical significance of the study is to provide reference to the innovation of rural financial institutions under the background of building a new countryside in China and enrich theories of rural finance to a certain extent by combing documents about the construction of the new countryside and financial innovation, and learning from successful experience about innovative practice of rural financial institutions in foreign countries.The practical significance of the study is to analyze the underlying causes of problems in the innovative practice of rural financial institutions, explore the future development of the innovation of rural financial institutions according to the research of current situation of the innovation of rural financial institutions in China, and then provide theoretical basis and practical basis for the constant improvement of the rural financial system and the construction of new countryside in our country.This thesis contains the following seven chapters. Chapter One is the introduction. It introduces the research background, purpose of the study, researching significance and researching methods. Chapter Two is literature review. Previous study of building the new socialist countryside, rural finance and financial innovation is consolidated and elaborated in this chapter. In Chapter Three, the author presents the relationship between the construction of new countryside and financial innovation. Chapter Four focuses on the practice of innovation of the rural financial institutions in foreign countries. In Chapter Five, the author describes the current situation and problems of the innovation of rural financial institutions in the course of building the new countryside in China, and analyzes relevant cases. Chapter Six is about the suggestions of the innovation of rural financial institutions. Chapter Seven is the conclusion and retrospection of the study.The main policy recommendations of this thesis are as follows:lowering the threshold of the rural financial market for private capital; broadening financing channels for new-type rural financial institutions; increasing the policy support for financial institutions which serve agriculture, rural areas and farmers; promoting sustainable development of new-type rural financial institutions.