Analysis Of Financial Sustainability Of Rural Financial Institutions In The Inclusive Financial System

Inclusive finance aims to let all social groups enjoy financial services,solve the problem of financial availability of vulnerable groups.However providers' value requires inclusive finance take into account of both expanding coverage and sustainability.Based on the forefathers' research,this paper analyzes the factors of the sustainability of rural financial institutions in inclusive financial system,and mainly studied the effect of technological innovation.We choose 14 rural commercial banks as research sample,set up panel model to test the effect of each factor on financial sustainability.Theory and empirical analysis shows that: loan ratio,liquidity ratio,return on equity has a significant positive effect on sustainability of rural financial institutions,while non-performing loan ratio and operating expenditure ratio has significant negative effect.Rural financial institutions who pay attention to use the innovation technology can effectively lower transaction costs,and improve the financial sustainability.After empirical analysis of factors of financial sustainability about inclusive finance,we create inclusive a financial sustainable index for inclusive finance.And we also compare the 14 rural commercial bank financial sustainable index in 2015.Then we choose Ninghai rural commercial bankChangjie branches and Jin Qiao village and town bank as examples to analyze theirmethods about how to realizethe financial sustainability,further demonstrates the importance of application of innovative technology in the financial sustainability.Technological innovationsuch as mobile payment,internet financial and so on provide feasible ideas about how to reduce the transaction costs of inclusive finance.Therefore,when our rural financial institutions are developing,they should attach great importance to improve the application ability of innovative technology,meanwhile improve the management level,to reduce the transaction costs.On the other hand,regulators should strive to improve the legal supervision system,quitsubsidy at the right time,build good macro environment for inclusive finance to realize the financial sustainability.