Study On The Competitiveness Of Rural Credit Cooperative Associations In Central China

China has been undergoing disparities between rural and urban regions and backward rural development from the economic perspective.In recent years,the central government has been working on a wide array of countermeasures in order to provide more supports to agriculture and drive rural economic development.As a major rural financial player,rural credit cooperative has been functioning well in many aspects,like serving Three Rural Issues(agriculture,rural areas and farmers),improving people’s livelihood and undertaking poverty alleviation with clear and definite objectives,etc.However,as the rural financial system experiences deeper reform and the central government continuously encourages financial institutions with various types of ownership to enter into the rural financial market,rural credit cooperative holds no longer the dominant position in the market which witnesses increasingly fierce competition,in which case rural credit cooperative is confronting with unprecedented challenges.Such fierce competition turns research on competitiveness appraisal of rural credit cooperatives into a more important issue.How to appraise and improve competitiveness of rural credit cooperatives has become a key issue facing our theoretic researchers in China.This thesis,based on theory of competitiveness and realities of rural credit cooperatives in the central regions,conceives an appraisal index system which aims at competitiveness of rural credit cooperatives in the central regions.The system conceived herein consists of 4 Class-I indexes including capability in safety,profitability,liquidity and sustainability,and 16 Class-II indexes including non-performing loan ratio.According to a comprehensive analysis and comparison,I am convinced that the Class-I indexes of capability in safety include 4 Class-II indexes: non-performing loan ratio,capital adequacy ratio,provision coverage ratio,concentrations of credit released to the largest debtor,Class-I indexes of capability in profitability include 4 Class-II indexes: cost-income ratio,return on assets,annual profit growth rate and profit ratio of capital,Class-I indexes of capability in liquidity include 4 Class-II indexes: liquidity ratio,deposit-to-loan ratio,cash asset ratio and excess reserve ratio,Class-I indexes of capability in sustainability include 4Class-II indexes: growth rate of total assets,proportion of staff having college-level or higher degree,deposit growth rate and loan growth rate.On this basis mentioned above,I adopted analytic hierarchy process to determine weighting of all indexes to the index system,and collected operating data from 5 county-level rural credit cooperatives of Z City in Henan Province to conduct empirical analysis and appraisal,find out how to evaluate the competitiveness of rural credit cooperative associations in different counties in Central China.The research contained herein has shown that competitiveness of rural credit cooperatives in the central regions is mainly subject to capabilities in safety,profitability and liquidity.It is concluded that rural credit cooperatives in the central regions need to improve capital adequacy ratio,proactively take various measures to deal with non-performing credit,reduce operating costs,expand profit-making channels and prepare accrual and provision well so as to improve the overall competitiveness.