Research On Informal Finance On The Economic Growth In Gansu Province

On March 28, 2012, the state council executive meeting decided to set up Wenzhou financial comprehensive reform pilot area, approval to implement the general plan of Wenzhou financial comprehensive reform pilot area of Zhejiang Province. On the development of Informal financing standard, improve the financial ability to service the real economy, to provide experience for the national financial reform. It makes the development of the Informal financial problems are from all walks of life, also become one of the hot issues in finance. Informal financial development is not only an effective way to make up for a lack of formal financial system, is also the important measures to promote economic growth. From the point of the country issued a series of policy, they have gave high attention to the development of informal finance, and on the positive role of the informal financial.In this background, this paper deals with the development of the folk financial system, and the typical representative of the western region of Gansu province to do the research, by means of theoretical analysis and empirical analysis on two kinds of research methods, in-depth analysis of the region’s informal financial impact on economic growth.First of all, on the basis of previous studies, this paper redefined the Informal financial. As the same time make a comparison between informal finance and formal finance, mainly expounds which channels to influence economic growth, from three points to analysis which is private investment, employment and institutional innovation. Secondly, this paper deeply understand the current situation of the development of Gansu Province informal finance, clarify development advantages and restricting factors in the region and the influence of financial economy in Gansu Province. On this basis, The informal financial influence economic growth in Gansu province made a statistical analysis of the main channels. Estimate informal financial size of the Gansu province. ADF test, Cointegration test, Granger causality test and impulse response function analysis based on VAR model has carried on the detailed empirical analysis to the province. Analysis indicates that the informal financial development in Gansu province did promote the local economic growth, economic growth has also promoted the development of the folk finance, which is better reflects the relationship between informal financial and economic growth. Finally, on the basis of the research conclusion of Gansu province folk financial development put forward the corresponding countermeasures and Suggestions of perfecting the financial system, to better promote the healthy and rapid development of economy.