Ant gold service set up rural financial business group How big is the rural market in the end

As early as 2014 Ali has begun the layout of rural finance, Ali's thousand counties and ten thousand villages Rural Taobao program, has so far set up more than 10,000 village-level service sites, covering more than 20 provinces across the country.

Why there is a huge gap in the rural financial market

Often, especially when the county economy has not yet achieved significant development, the traditional financial industry is the overall exclusion of the rural market, which in the long run has led to the financial exclusion of China's rural areas in the plight of more and more prominent. The so-called financial exclusion refers to the inability of certain groups in society to enter the financial system and obtain the necessary financial services in an appropriate form. At present, the main basis for determining the current situation of financial exclusion in rural areas in China is the six indicators proposed by Kempthorne and Wiley, namely, geographic exclusion, assessment exclusion, condition exclusion, price exclusion, marketing exclusion and self-exclusion, by comparing the current situation in rural areas with the degree of fit of the above indicators, we can easily find out the huge financial services gap hidden behind the phenomenon of financial exclusion in rural areas.

First, geographic exclusion. Due to the remoteness of rural areas and the dispersed population, financial institutions face transportation obstacles or high costs in carrying out their business, resulting in inefficient and inactive financial services. According to the relevant data released by the CBRC, as of the end of 2009, there are still nearly 3,000 townships in China where no banking financial institutions have set up business outlets, accounting for about 7% of the total number of townships in the country, of which 342 townships have no financial services, accounting for 12% of the total number of townships with blank spaces for financial institutions. The low coverage of bank branches in rural areas reflects the neglect of the rural market by the traditional banking industry.

Second, the assessment of exclusion. The rural market is generally faced with the pain of overly strict assessment of financial services assessment, on the one hand, the rural production and business activities are vulnerable to the natural environment, the production cycle is long, unstable production, poor economic efficiency, the risk of borrowing is extremely uncontrollable. On the other hand, rural areas are a credit market with an overall biased credit environment, where farmers lack basic financial knowledge and a minimum contractual spirit, making it difficult to form a rural credit system. Based on the consideration of controlling risks, banks can only reduce the incidence of risks by setting up strict loan evaluation procedures. Some data show that by the end of 2015, China's agriculture-related loans only accounted for about 28% of the total amount of loans, which is sufficient to illustrate the current situation of the difficulty of lending in rural areas.

Third, condition exclusion. Conditional exclusion is essentially the same as assessment exclusion, that is, the banking industry by raising the qualification threshold for farm loans to achieve wind control. Taking rural credit union loans as an example, the borrowing conditions for rural individuals include proof of stable income, proof of repayment ability, and marketable assets as collateral. But the fact is that most farmers do not have the right to property, so they can't borrow by pledging real estate, and the high default rate of credit loans not only hinders the normal development of rural lending services, but also further deteriorates the rural credit environment.

Fourth, price exclusion. Considering the high-risk nature of rural loans, the central bank once issued a document allowing rural financial institutions to have a larger and more flexible floating range on loan interest rates than other commercial banks, with the range of interest rate fluctuations much larger than that of general commercial banks. Taking rural credit unions as an example, the floating authority of loans of rural credit unions in most areas is 90% to 230% of the benchmark interest rate, and the floating range of more than 200% accounts for more than 70%. In addition, according to information, rural credit union loans usually also require farmers to pay 5 to 10 percent of the loan amount in stock. Rural financial institutions in the implementation of the loan interest rate of this high fluctuation, both increase the difficulty of farmers to borrow, but also reduce the enthusiasm of farmers to borrow from formal financial institutions.

Fifth, marketing exclusion. Marketing exclusion mainly refers to the number of rural financial institutions and the scarcity of service personnel and the single supply of financial products. On the one hand, the data show that by the end of 2008, the average number of financial institutions per 10,000 rural population has 16.7 service personnel, the lack of rural financial service personnel to a certain extent affects the development of the breadth and depth of rural financial institutions services. On the other hand, the business varieties of rural financial institutions are too single, concentrating only on savings and credit, and the structure of financial supply is extremely unreasonable.

Sixth, self-exclusion. Some economically underdeveloped rural remote areas, due to the closed environment, information lag, the local population generally to the new concept of acceptance is not high. As a financial institution, and this part of the group is stripped, and they are excluded from the traditional financial system at the same time, themselves also exacerbated the sense of strangeness and distrust of traditional banks.