Farmers Microfinance Business Of Agricultural Bank Study On Sustainable Development

As one of the core issues concerning agriculture, countryside and farmers, the difficulties for farmers to get loans has been the focus of the government, the public and the academic circles. Though loans to farmers is significant in alleviating the poverty of farmers, improve the welfare of farmers and promote social harmony, because the rural financial market information asymmetry is serious, transaction costs are high and farmers are lack of effective collateral, formal financial institutions are generally reluctant to enter rural financial market. Therefore, farmers are generally hard to get loans, especially the micro-loans to low-income farmers.Since the1980s, China has been exploring the micro-loans to farmers project and has experienced several stages, the driving-stage of international help-the-poor organizations, the pilot-stage of domestic non-governmental organizations, the promotion-stage of government pushing the financial institutions to implement the project, and the spontaneous exploration-stage of the formal financial institutions and so on. Although some achievements have been made, the sustainable development has not been attained.As a large state-holding commercial bank which owns the branches across the urban and rural areas, the Agricultural Bank of China is embodied by the government the historical mission concerning agriculture, countryside and farmers:to take micro-loans to farmers as the key product to expand rural credit markets actively so as to perform the social responsibility of services for farmers. However, as a public shareholding listed bank, profit maximization is its main business objective. Thus, micro-loans to farmers must achieve commercial operation and sustainable development. The aim of the article is to study the sustainable development of micro-loans to farmers and put forward some proposals conducive to the sustainable development of micro-loans to farmers.Given that there is a lot of research on micro-loans to farmers among academic circles, the author adopts the method of linking theory with practice, by studying rural finance theory, asymmetric information theory, transaction cost theory, social capital theory, etc, to find the theoretical reasons of the difficulties and problems related to micro-loans, and to provide decision-making basis for practice. After that, by doing comparative study on the development and the practice of micro-loans to farmers at home and abroad, the author obtains the inspiration and lessons of the Agricultural Bank of China’s micro-loans to farmers. With case analysis, the author has an in-depth study on the Grameen Bank mode, the Indonesian People’s Bank mode, and the micro-loans development mode of the Rural Credit Cooperatives of China and Postal Savings Bank of China. Finally, by using the analytic hierarchy process, the author studies the sustainability of development of micro-loans to farmers of the Agricultural Bank of China one by one.Through the research on the sustainability of external environment, internal conditions, marketing services model, loan guarantees mode, organizational management, business profitability and risk control ability and other factors of the Agricultural Bank of China carrying out the business of micro-loans to farmers, the author draws the conclusion that the micro-loans to farmers business has basic conditions for sustainable development, but also faces with many challenges. In response to these challenges and problems, the article puts forward policy recommendations.