Research On Depth Of Outreach Of The Rural Financial Services

Improving depth of outreach of rural financial services and having full outreach of basic financial services in remote rural areas are important goals of rural financial reform in China. How to measure depth of outreach of rural financial services in China and whether can clients'poverty measure depth of outreach of rural financial services? How clients'poverty affect the present depth of outreach of financial services in rural China. Studying the situation and formation of depth of outreach of financial services in rural China is not only a necessary condition to improve the depth of outreach of financial services, but also a solid foundation to promote rural financial reform in China.Firstly, this paper constructs a theoretical framework of outreach and sustainability and then define the concept of depth of outreach on the basis of the exiting related literatures. Poorer the clients participating in the financial service are, deeper the depth of outreach of this financial service is. Then we review studies on the multidimensional poverty measurements and how each poverty dimension affecting farmers financial participation behavior. Secondly, based on the 2010 China rural household data this paper measures and compares the present depth of outreach of rural credit, saving and investment services, using multidimensional poverty to measure the depth of outreach. Then we summarize the main features of depth of outreach of China's rural financial services.Finally, based on the measurements above, we use the Logit and Probit models to analyze how multidimensional poverty affects households financial participation behavior, thus affecting the present depth of outreach of financial services in rural China.The results show that Households multidimensional poverty has a significant positive impact on credit service participation. As multidimensional poverty deepens, farmers are more likely to participate credit service, leading rural credit services to having a higher depth of outreach and full outreach of the rural poor households. Multidimensional poverty has a significant negative impact on farmers' propensity to saving. The deeper multidimensional poverty is, the less propensity to saving farmers have. Therefore, saving services focus on non-poor households and reach only part of rural poor households and almost none of the most poor households. Multidimensional poverty has no impact on farmers'investment behaviors. These services focus on non-poor households and have a small customer size. Based on the measurement and empirical analysis of depth of outreach, we try to give some policy recommendations.