Household Characteristics And Its Impact On The Formal Credit Behavior Of Rural Household

The financial repression problem seriously blocks the development of rural economy in China. The solution is to use collateral or collateral substitution to relieve the information asymmetry between farmers and financial institutions. This paper, against the realistic background of farmers’ lacking of mortgages in China, plans to screen farmers’ characteristics, analyze influence factors of formal credit demand and of access to formal credit, find household characteristics of these factors, and then provide decision-making basis of product and service innovation for formal financial institutions. At the same time, it also can provide directions for obtaining formal farmer loan from the perspective of their own farmers. Henan Province, rural population accounts for about 64%.With the largest population province as a sample, this study, has a special theoretical and practical significance for the construction of the Central Plains Economic area.Domestic and foreign scholars have conducted a great deal of research on the rural financial market and the rural household borrowing behavior. The research lays an important theoretical foundation for further analysis of the rural household behavior in China. However, most of the existing research analyses the causes of rural household credit inhibiting from the angle of rural financial supply system, instead of the borrowing behavior of rural households. And it is rather than as an economic family unit. On farmers borrowing demand and satisfaction degree of empirical analysis of impact factors, most of the empirical research on the rural credit market, studies that distinguish between the formal credit deficiencies. In the empirical analysis of influencing factors on farmers’ borrowing needs and satisfaction, most of the empirical research are in the light of the whole rural credit market, instead of the distinction between formal credit. Moreover, the study in the angle of household characteristics is lack, in the empirical analysis of influence factors on the borrowing behavior of rural households. Therefore, the household with money demand is as the study unit in this article. Then we make empirical analysis about the influence factors of formal credit’s availability, and find the factors that influence farmers found the characteristics of formal loans, so as to make a contribution to the related research.In this paper, the data is from more than 1500 copies of the questionnaire these are the results of National Natural Science Fund- "Study on the rural financial repression in China from the perspective of collateral substitutes". The survey covers the basic situation, farmers lending, savings, money lending conditions, household characteristics(income structure, land leasing, mortgage social capital and group lending), loan characteristics(amount, term, loan repayment season) and the cost of borrowing(guarantee, interest rate, human, other transaction cost) etc.. Based on the firsthand data, this paper makes the statistical analysis of farmers’ loan amount, interest rate, channel, use, duration, type and the potential demand. And according to the focus of the study, we analyze the formal farmer’s credit behavior. Then according to the different features of farmers, farmers’ lending behavior is studied, in order to study the relationship between the different characteristics and farmers’ lending behavior. On this basis, the paper uses Logistic model to make empirical analysis about the influence factors of formal credit’s availability, so as to reveal the relevant factors. Then it puts forward the policy ideas and suggestions to increase the availability of farmer loan, active in the rural credit market, alleviate the rural financial repression, invigorate the rural credit market, and alleviate the rural financial repression.