Inclusive Financial Development And Rural Internal Income Gap

Since the reform and opening up, China's economy has maintained a rapid growth, the Chinese farmers' income has been greatly increased, and the release of the vitality of economic development has greatly improved the economic situation of rural residents in China. But with the rapid economic growth, China's overall rural income distribution gap is continuously increasing. How to narrow the income gap among rural residents is one of the important problems that need to be solved in the current construction of new countryside. Inclusive finance provides financial services for vulnerable groups with innovation credit model and system arrangements,which should benefit low-income groups in rural areas from the development of the finance,and then help them get rid of poverty status,so as to optimize the structure of rural income. But from a practical point of view, compared with the traditional financial, inclusive finance can reasonably solve the problem of serious gap between the rich and the poor? The answer to the question has important theoretical and practical significance to guide the practice of inclusive finance and income distribution. Based on this background, this paper selects Guangdong Province as the research subject, and combines with Inclusive Finance Development Theory and Regional Economic theory, and carries on the thorough discussion to the relationship between Guangdong Province inclusive financial development and rural residents internal income gapThrough the research, this paper draws the following conclusions:(1)During the period of 2002-2014, the inclusive finance Guangdong Province stays at a high level, in 2014 the inclusive financial index reached 0.667. But during the 13 years, Guangdong Province inclusive financial shows a similar U-shaped fluctuation trend, namely financial inclusion level obviously decreased firstly, and then presented the rapidly rising trend, which reflected the volatility changes characteristics. In addition, the inclusive financial system in the Guangdong Province is still biased in favor of the structure of the commercial banks, microfinance institutions community and grassroots development is still relatively slow, system structure adjustment is still slow, inclusive financial system exists inherent fragility.(2)Relative to the financial service dimension, the range of financial services plays more dominant effect in Guangdong province at this stage in the development of inclusive finance, this is because the weight of the range of financial services dimension especially the weight per one million square kilometers, the number of financial professionals per million people is relatively high(0.28, 0.2), which shows the expansion of financial services in the geographical and population dimensions of supply, especially the expansion of financial services in rural areas and farmers supply vulnerable groups, are conducive to promote the overall inclusive finance,especially the development of Inclusive Finance in rural areas. conducive to improve the imbalance in the distribution of rural residents in rural areas of Guangdong province.(3)The relationship between inclusive financial development in Guangdong Province and rural residents income distribution gap exist a long-term equilibrium relationship. From the point of view of cointegration equation coefficients, the development of inclusive financial scale coefficient is only 0.047, which means that inclusive financial level improves by 1 percentage point, the income gap of rural residents will has 0.047 percent change. This result reverse that the inclusive financial development really played a role in narrowing the income gap of rural residents in Guangdong Province. But in the short term, the influence of inclusive financial Development on the income gap of rural residents is not significant(the coefficient of the vector autoregressive model is not significant). For a long time, inclusive finance especially the improvement of rural financial inclusion degree play a significant positive role in improving the distribution of income status, suggesting that at present the development of inclusive finance plays more important role in poverty reduction in rural areas than the traditional financial development.(4)There is a long-term equilibrium relationship between the rural residents' income gap and the level of urbanization in Guangdong Province, the level of urbanization is the Granger cause of income gap of rural residents, but in the short term, improving the level of urbanization has no effect on the income gap in rural areas. In addition, the Granger causality test results further demonstrates that the inclusive financial development in Guangdong Province really narrows the income gap of rural residents, besides, the variance decomposition results show that effect of the development of inclusive finance in Guangdong Province has up to 40% contribution to the income difference of rural residents.(5) In order to further promote the development of inclusive finance, and then improve the rural residents' income gap, this paper puts forward the following suggestions: firstly, perfecting the inclusive financial service system, and expanding the coverage of inclusive financial services; Secondly, stimulating the vitality of inclusive financial supply, and then improving the innovation of financial products and services; Thirdly, establishing the inclusive financial poverty reduction target screening mechanism, improving the pointing accuracy; fourthly expanding the rural low-income groups weighted strength, enhancing their self-development ability; Fifthly, optimizing the inclusive financial infrastructure construction, and improving the rural inclusive finance service convenience.