Six manifestations of market failure _ Discussion on the failure of rural financial credit market in China and its intervention policies

As an important part of China's financial system, rural finance has a significant correlation with rural economic development to some extent. However, due to the lagging development of China's rural financial market, the market is out of order. This paper analyzes and discusses the failure of rural financial credit market in detail, hoping to find relevant countermeasures to solve the failure of financial credit market.

Keywords:: rural financial credit market market failure policy

1. Summary of rural financial and credit market demand

There are 900 million farmers in China, accounting for 70% of the total population. According to the analysis of agricultural credit in 2009, the total loans reached1420.48 billion yuan, accounting for 3.8% of the total loans in China. The total agricultural deposits are 75 14 billion yuan, accounting for 2. 1% of all deposits. There are great differences in structure, quantity and scale between urban and rural financial credit markets in China. Naturally, the service concept of financial credit and the demand for financial products are also very different. The demand for credit in rural areas is small and insufficient, and the main purpose of lending is consumption and production; In rural areas, due to the constraints of economic conditions and traditional concepts, the concept of financial services is relatively weak, and the concept of financial management is relatively backward. Only a few users only borrow from financial institutions occasionally, and the effective demand in rural areas is insufficient.

The change table of deposit and loan and loan-to-deposit ratio of rural credit cooperatives is as follows:

However, with the continuous implementation of the policy of benefiting farmers in recent years, the rural economy and people's living standards have been improved to varying degrees. The China Municipal Government encourages farmers to start their own businesses and the development of township enterprises. Many successful entrepreneurs return to their hometown to invest and promote the development of their hometown. In order to completely reduce the living standards of urban and rural areas, help farmers live a well-off life and provide more start-up funds for rural development, it is necessary to increase rural credit investment, which is not only an urgent need for new rural development, but also a source of strength for new rural construction.

2. The main problems faced by the development of rural financial credit market in China.

The rural population of China occupies half of China. Due to the constraints of economic conditions and traditional concepts, as well as the lack of infrastructure of financial institutions, there are many problems in China's rural financial credit market. Therefore, in order to realize the healthy and sustainable development of China's rural financial credit market and improve people's living standards, it is necessary to analyze and discuss the main problems that hinder the development of rural financial credit market.

2. 1 The coverage of rural finance is relatively low.

In the rural financial market, the lending method is mainly relational lending, supplemented by contractual lending. Through the investigation of rural financial market in China, it is found that when farmers encounter difficulties or need funds for their own development and other investments, 65.8% will borrow from relatives and friends, while only 20./kloc-0.4% will choose to borrow from regular banks or other credit and financial institutions. In 1990s, Agricultural Development Bank accounted for18.9% of rural credit; Agricultural Bank of China accounts for 3.6%; Rural credit cooperatives accounted for 30.6%; In 2003, the deposits of rural credit cooperatives were 2,385 billion yuan, and the loan balance was171910.40 billion yuan, accounting for 1. 1.08% of all financial institutions' loans, of which agricultural loans accounted for 84./kloc-0. At the end of 2004, the balance of rural credit loans was 65.438+092.3784 billion yuan, accounting for 65.438+00.85% of all loans from financial institutions, of which agricultural loans accounted for 56.79%. Agricultural Bank accounts for13.96%; Agricultural Development Bank accounts for 4.05%.

At the end of 2005, the balance of deposits of rural credit cooperatives nationwide was 3,257.3 billion yuan, and the balance of loans was 2,235.4 billion yuan, of which agricultural loans 1 0,007,654.38+0 billion yuan accounted for 46% of the total loans, while agricultural loans of rural credit cooperatives accounted for 87% of the loans of financial institutions nationwide in the same period. To sum up, rural credit cooperatives play an important role in rural credit supply, but the coverage of rural credit cooperatives is very low, and farmers rarely borrow money through rural credit cooperatives.

2.2 The main body of rural financial services is single, and the credit supply capacity is insufficient

The main body of rural financial services is the rural credit cooperatives with farmers as the main body or the Agricultural Bank of China, which are few and far between. Although China Agricultural Bank is regarded as a specialized bank for farmers' loans in China, its distribution in rural areas is relatively small at present, and the supply capacity of credit and the storage of reserve funds are seriously insufficient, which cannot meet farmers' demand for funds. However, as a rural credit cooperative or agricultural bank, the promotion of farmers' lending is not in place. So it can't meet the needs of farmers.

Due to the low disposable income of farmers in China and the slow growth of deposits in rural financial institutions, the following figure shows that the income gap is widening, the gap between urban and rural savings is also widening, and the rural credit market is dualistic and lagging behind.

2.3 The credit risk control system needs to be established and improved.

One of the reasons for the problem of "difficulty in borrowing and lending" is the dislocation of rural credit supply system and demand system. In the establishment and perfection of rural financial system, due to the late development of rural financial system, short establishment time, relatively backward compared with cities, financial institutions bear higher financial risks, and rural credit work lacks innovation ability. Through the investigation of credit finance in a rural area of our country, it is found that after farmers borrow, there are 56. 1% farmers. There are 3 1.4 1% farmers who think that there is no pressure on future loans. However, few users will not repay their loans on time, and there is no reasonable, scientific and mature system to restrain farmers' behavior. Therefore, large banks, such as China Construction Bank and commercial banks, have withdrawn from the rural financial market one after another, which leads to a single rural financial structure and a serious problem of backward rural capital circulation, which will worsen the environment of the rural financial market.

2.4 The source of payment is unsustainable.

Generally, in the process of lending to rural credit cooperatives or banks, in order to ensure that the funds can be recovered within the specified time, and to prevent the phenomenon of non-repayment of loans, which will bring damage to the country's economic construction, farmers' loans not only need proof of various documents and materials, but also need certain fixed assets as collateral, such as houses, cars, land, jewelry and so on. Farmers are usually unable to meet their financial needs with the assets they guarantee. Moreover, it takes a long time from farmers' loans to loans, and various procedures are cumbersome. More often, they can't get a bank loan again. Therefore, the source of farmers' loans is not sustainable. In addition, by the end of 2006, postal savings institutions and commercial banks had withdrawn107.067 billion yuan from rural areas in Anhui Province, accounting for 5 1.9 1.0% of all deposits of financial institutions in the same village in Anhui Province, of which the balance of postal savings institutions was 30124.4 million yuan, all of which. The balance of deposits in commercial banks was 75.823 billion yuan, an increase of 6565438+26 million yuan over the end of 2000. Therefore, the source of rural loans is unsustainable.