The Performance Evaluation Of Hunan’s Rural Financial Market Efficiency

As a core factor on the economy, finance occupies a pivotal position in the socialist market economy. Also, rural finance is very important to the rural economy. Therefore, whether it is the development of modern agriculture and promotion of food production and farmers’income, or the comprehensive reform of the rural economy, the function of rural financial markets must be paid fully attention. However, currently rural finance ecological environment such as the weak rural economical basis, unsound social credit environment, twisted activities of local government and incomplete systems relevant to rural finance, has caused a low rural financial efficiency, which has become the bottleneck of the development of Hunan’s rural economy. Hunan is a big agricultural province, and how to reform and develop the rural finance and increase the rural financial efficiency to promote economic development in rural areas is a real problem need to be solved. In order to provide financial decision support for cultivating an optimizing the financial market efficiency in rural areas, the thesis was based on the existing research results, and applied Analytic Hierarchy Process(AHP) theory to evaluating rural financial market efficiency of Hunan Province.On the basis of the three rural finance theories-subsidized credit paradigm, Rural financial market theory and imperfectly competitive market theory, the rural financial market operation mechanism is analyzed in the thesis. In the background of the Analytic Hierarchy Process(AHP) and the collected data, Hunan’s rural finance development and Hunan’s agricultural credit situation are analyzed. The factors restrict Hunan rural finance efficiency are the followings according to the analysis: the weakening function of rural financial institutions to support agriculture; rapid agricultural loan business growth but poor loans and low net profit rate; High development for the agricultural insurance business but high operating cost and loss ration; imperfect rural finance institutions; poor rural financial ecological environment.AHP is used to analyze the suitability of rural financial market evaluation. Its index system formed by three levels of index in Hunan province is built. According to AHP, the operating environment has the most impact on the Hunan province’s rural financial market efficiency through comparing in pairs. Then it is the credit impact and the last one is the ecological environment of the rural financial market. In this case the optimization strategies of the rural financial market in Hunan province are put forth.Based on the empirical test on the rural financial market in Hunan province, it provides theories to increase the rural financial market in Hunan province. The empirical test shows that:first, harmonious ecological environment should be created from the angle of building harmonious rural economic environment, strengthening rural credit environment and optimizing the legal environment of the rural financial market. Second, rural financial credit environment should be optimized through forming a "green passage" for the guarantee, reinforcing financial supervision, perfecting rural financial risk security system, improving credit service of rural financial institutions. Third, multilevel and comparative financial market indexes are built. With the improving rural financial market environment in Hunan province, the future of the rural finance will be better, and it will contribute to rural economic development in Hunan province.