Study On The Effect Of Farmers' Formal Credit To Support Agriculture In Poor Areas

The increase in investment costs in agricultural production has pushed up the demand for agricultural capital and diversified demands for financial products by various agricultural operators.Therefore,the development of modern agriculture cannot be separated from a large amount of capital investment and strong support from the financial sector.However,the financial services for agriculture,rural areas and farmers are characterized by trivial business,high cost and poor profitability,as well as the recovery of Period's long-term income.In addition,it is difficult for farmers to reach the minimum economic scale of financial institutions due to their small demand for credit and lack of sufficient collateral.Therefore,the limited supply of credit funds to farmers by formal financial institutions has led to the widespread fragmentation of financial markets and the phenomenon of financial exclusion in rural areas of China,especially in poor areas.Long-term supply-oriented credit constraints have affected the expectations and choices of farmers' loan behaviors in poor areas,causing farmers to have cognitive biases and subconsciously believe that they cannot obtain loans,thus inhibiting effective credit demand.As a result,farmers' production and operation have long been faced with the dilemma of insufficient internal financing and insufficient external funds available.In particular,discount loans cannot reach the poor effectively,resulting in insignificant effect of farmers' formal credit support for agriculture.Therefore,it is of great significance to study the effect of formal credit support for agriculture in poor areas from the perspective of farmers to alleviate the bottleneck restricting the sound operation of rural financial markets and the development of agriculture,rural areas and farmers in poor areas.This paper analyzed and defined the connotation of the effect of formal credit support for agriculture,rural areas and farmers by combing and summarizing the relevant literatures on formal credit support for agriculture,rural areas and farmers.It constructs the theoretical framework of the effect of formal credit support for agriculture by dynamically interpreting the three levels of "whether the farmers get full formal credit-how satisfied are the farmers with the use of formal credit-whether the input of formal credit funds improves the income of the farmers",namely,the breadth,depth and effect of formal credit support for agriculture.Based on the survey data of farmers in Liupan mountain area of Gansu province,Tobit-ISM model is used to empirically test the extent of formal credit support for agriculture and its influencing factors in poor areas.The entropy weight method-cloud model and OLogit model are used to measure and study the depth of farmers' formal credit support for agriculture and its influencing factors in poor areas.PSM model is used to analyze the income effect of formal credit on farmers.Based on the relevant conclusions of empirical research,this paper puts forward some countermeasures and suggestions to improve the effect of farmers' formal credit support for agriculture and accelerate the process of poverty eradication in poor areas.The conclusions of this study include:(1)the extent of formal credit support for farmers in poor areas.The number of farmers receiving formal credit in poor areas has increased significantly,but the proportion of farmers receiving full loans is not high,indicating that the credit needs of farmers in poor areas are still not effectively met.The research shows that the factors affecting the availability of formal credit for farmers are at different levels.Among them,loan channel,loan interest rate,loan term and Intended Use Of The Loan are the surface factors.The source of income and the number of children attending university are indirect factors of the middle level.The age of farmers,their understanding of the loan policy and the propaganda of the loan policy are the deep root factors.(2)The depth of formal credit support for farmers in poor areas.Farmers' satisfaction expectation for formal credit is 4.0312,which is generally satisfactory,but there are still some problems in the satisfaction structure.For example,the satisfaction expectation for loan term,convenience of financial institutions,loan amount and types of loan products are all lower than the overall satisfaction,indicating that there is still much room for improvement in financial institutions' services.Moreover,factors such as the lender's educational level,the proportion of agricultural income and social relations have a significant positive impact on farmers' formal credit satisfaction.Lenders' working hours,family burden ratio and poor households have significant negative effects on farmers' formal credit satisfaction.(3)Formal credit has a significant effect on farmers' income in poor areas.Farmers who have received formal credit have significantly increased their agricultural income level compared with those who have not,with an average increase of 18.9 million yuan.According to the research conclusion,this paper proposes to deepen the market positioning of rural formal financial institutions,increase agricultural insurance support and innovation,promote multi-party cooperation between government and banks,and give full play to the optimization suggestions of market mechanism,so as to improve the effect of farmers' formal credit support for agriculture in poor areas.