A Study On The Factors Affecting New Agricultural Business Entities’ Demand For Credit And Credit Availability

In recent years, the new agricultural business entities grow rapidly all over the country, and have become the effective carrier of implementation management system of rural households in China basically stable and agricultural moderate scale management. It is likely to be the main force of scale, industrialization, intensification and commercialization in the future of our country agricultural production. However, due to its business scale is far greater than the ordinary farmers in general, and it needs to invest more manpower, machinery, technology in a long-term, the new agricultural business entities need a lot of money. It’s unthinkable for the new agricultural business entities to invest rely on their own money. It need to seek the help of external funding, especially the fund of rural formal financial institutions. However, the reality is that the rural financial market systemic defects and the credit rationing of formal financial institutions makes the new agricultural business entities cannot meet its capital demand in a long-term. The difficult problem of financing from formal financial institutions is very outstanding, and has become the important restriction factor of production and operation.The financial demand determines the direction of supply reform. Therefore, in the current situation, to perfect the reform of rural financial supply and promote the development of agricultural economic transformation, it is necessary to understand the formal credit demand and the influence factors of availability of the new agricultural business entities. So, what is the current performance of the formal credit demand and availability of the new agricultural business entities? What’s the difference between the new agricultural business entities and ordinary farmers? What are the key influence factors of formal credit availability? How to make full use of the key factors to improve the availability of credit in the process to improve the rural financial system? Around these problems, in this paper, we taking Jiangsu province as an example, studies the formal credit demand and its influencing factors of availability of the new agricultural business entities, based on the perspective of financial demand. First of all, using the survey data from north, middle and southern Jiangsu province, the article analyzes the status quo of formal credit demand and the availability of the new agricultural business entities, and analyzed the different credit performance from general farmers. On the basis of this, the paper analyzes the influence factors of formal credit demand of the new agricultural business entities empirically using the logit model. And then the article analyzes the influence factors of formal credit availability of the new agricultural business entities empirically using the Tobit model.The research mainly gets the following conclusion. (1) Compared with the general farmers, the new agricultural business entities’capital demand is bigger. They tend to choose formal financial channels for financing. Their formal credit demand present certain rule of industries and season. Most of the new agricultural business entities to apply for formal credit are used for agricultural production. When to apply for a loan from formal financial institutions, most of the new agricultural business entities only get part or all haven’t received. This reflects the new agricultural business entities’formal credit availability is low, and they faced a prominent financing problem in the process of agricultural production. (2) There are four aspects that Impact on the normal credit demand of the new agricultural business entities, including the personal characteristics of the family key decision makers, family characteristics, the situation of agricultural production and operation and the rural financial institutions. Specifically, the education degree of family key decision makers, degree of the cognition to the formal financial institutions lending policies, total household assets, agricultural production and operation scale and type have significantly positive influence on the formal credit demand of the new agricultural business entities, and loan interest rate has very obvious negative impact on the formal credit demand of the new agricultural business entities. (3) The degree of the cognition to the formal financial institutions lending policies, social relations, total household assets, and the number of the new type of rural financial institutions has significant positive influence on the formal credit availability of the new agricultural business entities. The agricultural production and operation scale of the new agricultural business entities has significant negative impact on their availability of credit.In order to alleviate the financing problem of the new agricultural business entities, and to improve the formal credit availability, this paper puts forward the following four policy recommendations, based on the above research conclusion. (1) Promote the innovation in financial products and services of rural financial institutions to improve the efficiency of financing. (2) Increase financing special subsidies for the new agricultural business entities to reduce their cost of financing. (3) Optimize the rural financial ecological system to improve the financing environment. (4) Appropriately raise the level of rural financial market competition to increase the financing options.