Analysis On The Extent And Influential Factors Of The Formal Financialcredit Rationing Of Rural Households In Central Shaanxi Area

Early stages of economic development in China, agricultural production provided a lot offinancial support for industrial construction. With the economic growth, the urban-rural gap isgrowing, so the problem of agriculture, rural and farmershas got the value ofcentralgovernment and the State Council, as well as more attentions and researches ofscholars.Effectively promoting agricultural production and farmers’ income, as well aspromoting the healthy and sustainable development of the rural economy and rural work, hasbecomethe focus of the current rural work. The reform of modern, large-scale andmarket-orientedagriculture has become one of direction of the transformation of traditionalagriculture sought by local government, andfunding issue for rural economic developmentfrom rural financial market has become the focus of attention of many scholars, because theeconomic development is bound to need the support of a lot of money.Moreover, rural creditcooperatives, postal savings and other formal financial institutionshave absorbed a largeamount of deposit money from rural areasfor a long time, but they released a small percentageof loans to farmers, which has led to serious formal financial credit rationing phenomenon inrural areas, and for rural economic development, this is undoubtedlya huge obstacle. In thiscontext,this paper chooses the phenomenon of farmers’ formal financial credit rationing incentral shaanxi area as the research object, hoping to get more detailed understanding of thelocal extent of credit rationing and its influencing factors and putting forward more targetedpolicy recommendations, in order to alleviate the extent of farmers’ credit rationing andpromote the sound development of the rural economy.Through learning from the credit rationing theory and empirical research, this articlehasgiven specific definitions to the concept of farmers’ credit rationing, formal financial creditdemand and rationing recognition mechanisms and evaluation systeminvolvedin this study.Given that the estimated efficiency of the bivariate Probit model in the extent of creditrationing and its influential factorsis higher than the univariateProbit or Logistic model(ZhuXi and Li Zinai2006;Hu Xinbo and Zhao Bo2013), after descriptive analysis of five hundredhouseholds survey data obtained in Yangling, Yanliang and Pucheng that vigorouslypromoting large-scale and industrial development of agricultural,this paper uses the bivariate Probit model to estimate and testthe extent and influential factors of the formal financialcredit rationing of rural households, and finally, puts forward the countermeasure based onempirical results.Conclusions of this study are:(1) Farmers in central shaanxi area have a higher demandfor formal credit, but it is difficult to get loans from formal financial institutions. Degree offormal financial credit rationing farmers suffered is as high as88.04%.(2) Gender of thehouseholder, family arable land,family labor burden rate andhousehold spendingshowsignificant positive impact on farmers’ formal financial credit demand.(3) The householder’education level, family members, family income, whether to participate in the "company+farmers" organizations, and whether there are deposits in financial institutions havesignificant negative impact on farmers’ formal financial credit demand.(4) The householder’education level, family members, family incomeand whether there are deposits in financialinstitutions have significant positive impact on the supply of loans from formal financialinstitutions.(5) Family arable land and family labor burden rate show significant negativeimpact on the supply of loans from formal financial institutions.(6) Householder’ age, theproportion of various types of income, the ratio of productive spending, whether to participatein farmers’ cooperative organizations,the degree of understanding in microcredit,the ways toknow loan information, the number of village financial service outlets andthe distance to thenearest financial outlets have no significant effect on farmers’ formal financial credit demandor the decision of issuing loans from formal financial institutions. According to theconclusions from the study, this paper presents some possible solutions from the followingaspects hoping to contribute to the government’s decision-making and rural economicdevelopment. First, promote the formation of diverse competition structure in rural financialmarketto alleviate the extent of formal financial credit rationing. Second, strengthen theconstruction of farmers’ credit information sharing platform to improve the status of severeasymmetry of information. Third, disperse the dispersion pressure of credit default risk, andoffset thehigh-risk of agricultural loans by multiple pathways. Fourth, improve the educationlevel of farmers, and increase government’s financial investment on agricultural productionand marketing facilities construction.