Empirical Analysis Of Social Network Affects Rural Household Borrowing Availability

On account of the unjust distribution of resources between urban and rural areas in China,Such as less financial network,the lack of pertinence of financial products and financial service does not reach the designated position exists for a long time,thus farmer credit demand cannot be satisfied.This is a big problem in the current rural financial market.Under the action of asymmetric information,there are many restrictions in the process of the development of agricultural production and operation of business activities.Compared with the quality of life and income of urban residents,farm household level increasingly presents obvious gap.So solving rural peasant household borrowing problem is an important content of China's rural financial reform and the top priority.Based on social network theory,this paper constructed a social network measurement model on the basis of some indicators such as human spending ratio,strong relation network,the network scale,network heterogeneity,to explore the influence of social network to the peasant household borrowing mechanism.Henan province is China's largest agricultural province and population province.To select farmers in Henan as sample farmers to reflect the social networks and lending status quo of rural farmers full of representative.On the basis the questionnaire data including 925 farmers in Zhengzhou,Luoyang,Xinyang,Pingdingshan,Nanyang in Henan province,this paper examine whether social networks influence farmer's access to borrowing and from which access to borrowing(formal financial institutions,informal financial institutions lending,or mixing lending).To analysis the questionnaire data,according to the different applicable conditions of the model,selecting Logit model social network to examine the influence of whether farmers can obtain loan,and using Multivariate Logit model to test the influence of social network of which way to borrow.This article researches results: From the terms of the influence of social network for farmers to borrow,favor spending ratio,strong relation network,network scale,network heterogeneity all have significant positive influence to farmer's borrowing.Net difference has no significant effects on farmer's borrowing.From the terms of social network's influence of different ways to borrow,favor spending ratio,strong relation network,the network scale,network heterogeneity all have significant positive influence to borrowing of formal financial institutions,informal financial institutions lending,and mixing lending.This means that the more favor spending,the greater weight of farmers used human spending accounted,the greater the chance of borrowing from formal financial institutions,informal financial institutions lending,and mixing institutions.Farmers who have strong network can obtain more resources and information,the relatives and friends can give farmers more borrowing opportunities,the greater the probability of farmers obtain lending from the formal financial institutions.Network heterogeneity has significant positive on farmer's borrowing from informal financial institutions and mixing institutions.Net top and net difference have no effect on whether farmers will be able to get lending,but it has significant positive influence on farmers to borrow from informal financial institutions.Because of the rich information resources and reliable guarantee supervision,considered the borrowing process complex,high transaction costs,the characteristics of short repayment period of formal financial institutions,farmers prefer informal financial institutions lending such as borrowing from friends and relatives.Under the background of the current financial environment in our country,according to the theory and empirical research conclusion,based on the farmers social network perspective,the author puts forward suggestions from the aspects of national policy,financial institutions and farmers.First,the country should strengthen of quantity and quality of supply side of state and government.Perfect rural credit system,which can effectively reduce the supervision cost and risk in the process of financial institutions grant loan to farmers.To encourage and guide the healthy development of private financial institutions can make up for the flaws of the formal financial institutions in rural areas in the very great degree.Second,Rural financial institutions should actively develop credit products suitable for local farmers and reduce the distance between business people and farmers financial institutions,thus farmers have more trust in the financial institutions.The last,farmers should constantly cultivate good credit concept,manage their social networking relationships consciously and actively,use social network to meet the demand of their own borrowing.To solve the credit problems in rural areas,farmers should maximize the interests of the social network members by exchanging network resources and information.