Research On The Mechanism And Performance Of The Impact Of Interest Rate Liberalization On Rural Informal Finance

As an important part in the rural financial market reformation,rural interest rate liberalization reform process is getting deeper and deeper,and will continue to produce a full range of impact on rural financial market.In China's rural areas,the rural formal financial sector and informal financial sectors constitute the rural credit market in China.According to Stiglitz and Weiss(1981)classic credit rationing model,an increase in interest rates will chang the number and type of the borrower of rural formal financial sector through the risk premium compensation effect and borrower type structure effect.Therefore,with the interest rate reforming the interest rate getting gradually liberalized,China's rural financial sector will be affected.For the rural informal financial sector is an important supply of rural formal financial sector,it is bound to be affected by the interest rate liberalization reform and development.Based on the analysis of the existing literature research,this acrticle is to explore the mechanism and performance of the impact of interest rate liberalization on rural informal finance.First of all,this article combine the literature research results of the impact of rural interest rate liberalization on the rural financial market,and the economic performance of rural interest rate liberalization,based on which this article is to get further research;Then,according to the Stiglitz and Weiss‘s(1981)classic credit rationing model,combined with Xu Yueli's(2017)expanding model,this article summarize the theory;next,this article summarize the development of rural informal finance and the interest rate liberalization,and determine the corresponding indicator variables,on the basis of which this article construct econometric model for empirical research.Through theoretical analysis and empirical research,this article draws the following conclusions:(1)the impact of the development of interest rate liberalization on rural informal finance is negative;(2)as to economic performance,the interest rate liberalization unobviously weaken the affact of rural informal finance to farmers' consumption liquidity constraint,and obviously weaken the affect of informal finance on farmers' investment liquidity constraints;(3)through the risk compensation effect and endogenous technological effect,the interest rate liberalization makes the rural formal finance get more borrowers,and obviously reduce the proportion of the rural informal finance in the total amount of financing,which obviously means the scale effect more;at the same time,with the advance of rural interest rate liberalization,types of loans to farmers of rural informal finance is deteriorated,but the effect is not very obvious(4)the two-dimensional transformation of rural economy is an important factor affecting the rural informal finance,and compared with the interest rate liberalization in rural areas,the two-dimensional transformation of rural economy affacts the informal finance more.Not only that,the two-dimensional transformation of rural economy also affect the marginal impact of interest rate liberalization in rural areas on informal finance.On the basis of the above conclusions,this article puts forward two economic policy recommendations:(1)when promoting the interest rate liberalization,regulation and intervention of government departments should also be paied attention to in order to control interest rate floating in space,and make the rural financial develop in order and effectively;(2)accelerate the pace of improving the rural financial market system,through the establishment and improvement of the rural credit system,optimize rural information management system,strengthen the communication between rural financial sectors,sharing the borrower's information,as far as possible to avoid moral hazard and adverse selection caused by asymmetric information problems.