The Dualism Of Financial Exclusion

Western scholars and the financial institutions of developed countries set out to study the financial exclusion from the angle of financial geography, and devoted to improve the availability of financial services dating back to early 1990 s. Gradually, the problem of financial exclusion received widespread attention in Chinese academia. The existence of financial exclusion leads to the low availability and the narrow coverage of formal financial service. Vulnerable groups have choice but to borrow from the informal channels to meet their funding needs. In China, informal financial activities become active recent years. Informal finance company sprung up, such as P2 P platform, folk finance company etc. Among them, some fraudulent informal lending institutions appeared. Not only did them increase the cost of capital demanders and the risk of capital supplier, but also disturb the order of financial markets.Because of that, solving relevant questions of financial exclusion, and building a perfect, efficient, standard financial market has positive practical significance for improving the welfare and income of residents, narrowing the wealth gap of the whole society, as well as developing the national economy harmoniously.Following the pattern “theoretical analysis — hypothesis establishment— status described — empirical analysis”, this paper devotes to the study of the dualism of financial exclusion. It starts from practical problems resulted from microscopic survey data, and then analyzes the reasons for the formation of financial exclusion in China and the difference between urban and rural financial service availability. The article is divided into six chapters, the main content of the chapters are arranged as follows:In the first chapter, it derives the theoretical and practical significance from the introduction of the research background for the financial exclusion of the duality between rural and urban areas. According to the proposed problems it draws up the main research content, sets up the framework of this article, combs research ideas and steps, and summarizes the innovation point of this article.The second chapter reviews related researches in the field of financial exclusion of native and abroad systematically, and summarizes the themes, the contents, and their conclusions.According to the distribution of the urban and rural community bank branch zero inflation, the third chapter established zero inflation poisson regression model for bank outlets data to find explanation for the "urban bias" phenomenon. The results show that positive externalities of "agglomeration economy" induces "preference" when the banks set up branches in cities and towns; At the same time, minimizing the total cost is also an incentive of the bank’s choices, which means that the smaller population density, poorer infrastructure and basic public services cause zero inflation phenomenon when the banks set up branches in rural communities.In the fourth chapter, logistic regression model is set up to analyze formal and informal lending decision problem from the perspective of family. The research suggests that families’ credit decision is a comprehensive decision-making process. It is decided by the information acquisition ability, debt repayment ability, and constraint of the financial exclusion. On this basis, it made a further study by the use of nonlinear decomposition model of urban and rural household credit decisions difference. Results show that except for the factors such as education level, household net asset, the status of rural households is also significantly variable that affected the availability of normal lending.Chapter fifth introduces the type of financial exclusion studies the microscopic research field of the family by simplifying the classification of financial exclusion theory. Disordered multiple classification logistic regression model is established to figure out the factors of different types of financial exclusion, and finally reveals the dualism of urban and rural financial exclusion. Studies have shown that dual financial exclusion from internal and external decision-making strengthen the informal lending behavior of rural households.The sixth chapter inducts the research conclusions above, and puts forward the corresponding policy recommendations on how to break financial exclusion and its duality of rural and urban areas.