Research On The Financing Constraints Problem Of Peasants

At present, China makes great efforts to reform traditional agriculture, accelerating to achieve the modernization of agriculture. As the main part of agricultural production and management, peasants participate in economic activities more frequently, and their financing demand is increasing day by day. However, formal finance can’t satisfy the capital demand of peasants to a large extent. The peasants’ production and living consumption demand is restrained, and it is difficult to grasp the fleeting production investment opportunity, which is not conducive to realize the overall well-off goal. Therefore, it is of great significance to study the problem of peasants’ financing constraints deeply, to solve the financing problems of peasants, and to improve the availability of loan.The study is based on the investigation of the financing behavior of peasants, including 57 villages of 31 towns in Hunan Province. Firstly, the study used the way of descriptive statistics to analyze the basic characteristic of peasants’ financing at the present stage, including five aspects:financing channel, financing scale, financing purposes, financing maturity and financing costs. The results displayed, the scale, maturity, procedures and other aspects of the formal financial loans are not suited the capital demand of peasants. The internal management system of rural credit cooperatives is not so perfect that the hidden cost of peasants’ loan is high. So peasants are subjected to financing constraints to a certain extent. At many times, the peasants finance through informal financial channel, which is a passive choice. Subsequently, the study gave comprehensive consideration about the situation of financial institutions and the peasants, through designing the thorough peasants’ financing constraints identification mechanism. Then, the financing constraints of peasants were identified and measured. Through identifying,265 households in the sample,37 households are faced with demand financing constraints, including 31 households by the transaction cost constraints,6 households by the credit risk constraints. At the same time,29 households are faced with supply financing constraints. The result of the study shows that the financing constraints of peasants accounted for 24.90%. Then, the paper analyzed the factors that may result in peasants’ financing constraints. Firstly, the logistic model was used to analyze the impact of peasants’ characteristics on financing constraints. The result showed these six factors had significant impact on peasants’ financing constraints, including the annual income of peasant household, the annual expenditure of peasant household, the durable assets’ value of peasant household, the number of family labor, the social relations of the peasant household, the understanding level of peasant related the policy that financial institutions used to support the agriculture. Then the paper analyzed the impact of rural financial system reform and rural financial operating environment on the peasants’ financing constraints. Based on the reason of peasants’ financing constraints, the paper puts forward countermeasures and suggestions to alleviate the financing constraints of peasants from three aspects:the characteristics of peasants, the reform of rural financial system and the rural financial operation environment.