Analysis On China's Rural Financial Innovation Pattern

The financial system is the core and lifeblood of a country's economy. Rural economic structure is also inseparable from the efficient financial system. Financial system in our country is faced with both problems and innovations as well as backward situation and reform.In the innovation process of rural finance, government has played an important role. Itis the main engine which has been advancing reform and optimization. But rural financial development promoted by the government has gone through many detours in the development process. Due to policy causes, agricultural credit has been lack ofmortgaged property, and this dilemma has not been solved effectively. Since loans arerestrained, the support provided by rural financial institutions for the economic construction is limited.Although the government-led rural financial system have all kinds of problems, we can not completely deny the role of government departments, exclude government departments from the rural financial system and let the rural financial innovationcompletely dominated by the market. With the continuous trials of rural finance of all places, some government-led financial innovations have achieved good results. So in the process of China's rural financial innovation, what kind of role should thegovernment play is inseparable from the local economic and financial environmentsin rural areas.This paper conducts comparative research on the status quo of the rural financial innovation in Hubei and combines with empirical analysis and theoretical analysis. It first summarizes the research results of scholars in financial repression, financial organization system, management system, financial market supply and demand, risk prevention, informal finance, government involvement in the reform and otheraspects. Then it sorts out the process and status quo of financial innovation and reform in our country, and analyzes the status quo of financial innovation in terms ofrural financial system, policy support, risk control, credit guarantee system, financial service system and other aspects respectively. It puts forward government-led and market-led innovation models of rural financial system, takes Tongshan County and Jingshan County of Hubei province as the cases, and discusses the characteristics and the adapted environments of government-led and market-led innovation models ofrural financial system. It compares the characteristics of these two innovation models in different development conditions and finds out their respective adapted environments. The conclusion is that government-led financial innovation model can rapidly improve the quality of financial services in less developed areas, while market-led financial innovation model can play a greater role in well developed areas. It lastly puts forward suggestions on our country's current rural financial status.