The Farmer’s Financing Demand And Its Influencing Factors

The lack of access to credit has long hindered the development of rural economy and the increase of farmers’ income in China. With no collateral at hands, the farmers are hard-pressed to get loans from official rural financial institutions, and the financing difficulty is running rampant in rural China. As China’s major grain producing area, Henan Province plays an important role in ensuring national food security. Against this background, the paper focuses on Dengzhou City, Henan Province and studies the financing status and related problems there. The study is of important theoretical and practical values.Based on relevant literatures and researches at home and abroad, and employing the financing needs and related theories, the paper studies the rural financing status of Linpa, Rangdong, Sangzhuang, Zhangcun, and Liuji, the five major towns that fall in- to the administrative jurisdiction of Dengzhou city. The study covers an investigation on family size, production model, income and expenditure of the local households, and a description of the household financing scale, term, frequency, and satisfaction degree in the local area. On this basis, the paper uses the Logistic regression model to determine the factors that influence the local financing, and proposes corresponding policy recommendations.The study shows that(1) the production model, homestead area, non-farm expenditure and living expenditure of the rural household are positively correlated to financing needs, while the cash flow and annual income of the rural household are negative factors;(2) in terms of financing scale, non-farm expenditure and living expenditure of the rural household are positive influencing factors, and cash flow and annual income of the rural household are negative ones.(3)When talks about farmers feature, more than 70% of farmers through informal financial to get loans, financing scale focused on 1000-5000, the farmers financing terms are not fixed, the farmers want funds mainly for domestic expenditures.(4)Accordingly, the paper proposes such recommendations as encouraging the non-agricultural activities of farmers, strengthening the support of official rural financial institutions in financing famers’ non- agricultural activities, and improving credit system for farmers.