Research On The Market Position And Developmental Issues Of Hunan Rural Banks

As a emerging financial institution servicing peasants and micr oenterprises, Rural Bank, which services vulnerable groups, is a pro vider of rural credit products, also a complement of traditional rural financial markets. Its financial activities can not only produce a gr eat social effect, but also result in low even non-expected profits in a short term. Therefore, a determining factor for a rural bank to g row healthily is the proper position. Based on the policy and profit ability perspective, this paper, taking rural banks in Hunan province as the research sample, discusses the market positioning problem o f rural banks in Hunan province. Through theoretical analysis and p ractical discussion of rural Banks in Hunan province. It provides sc ientific advices about support direction and strength of financial inno vation for Hunan provincial government and the relevant decision-m aking departments, at the same time, it contributes to improving the efficiency of the financial resources and also has the practical sign ificance.Research findings: Hunan rural banks obtain the considerable d evelopment and the nationwide market share is 0.999/34. Based on the local market, Hunan rural banks, actively provide financial servi ces for peasants, create financial service models to meet the capitalrequirements for microenterprises and peasants, also expand busines s to realize their sustainable development. However, the growth pro cess of Hunan rural banks is suffering with a dual role paradox, on e is about the policy- serving the needs of agriculture, another one is the commercial management. In the aspect of policy-serve the n eeds of agriculture, Hunan rural banks exist some problems such as agriculture products lack of innovation ability, Institutional defects,inappropriate implementation of policy, the restriction of rural envi ronment, misplaced role of government, serving the needs of agricultu re blindly, benefiting peasant formally, Imperfect financial facilities and so on. In the aspect of commercial management, they also hav e some problems such as unreasonable ownership structure, Commer cial policy limitation, scan limiting economic benefits, lack of cash flow, deficient institution and system, lack of qualified personnel an d so on.This research points that the rural banks in Hunan province sh ould aim at becoming commercialized banking organizations that dif ferential themselves with localization development strategy. Although the policy- "bring values and supports to peasants" was the intenti on of the establishment and development of Hunan rural banks, the concept modern commercialized operation must be understood and accepted given their commercial nature however long this contradiction has been existing. We should consistently complement governme nt policy and improve external environment, ameliorate the backgro und of rural finance and culture based on which to further develop rural banking business. While keeping the policy service nature, all the Rural banks in Hunan province, under the leadership of the in itiating bank, promote the modern commercialization, so as to realiz e the sustainable development of the specialization, localization and differentiation of Hunan rural banks.