Research On Rural Financial Exclusion In China

Finance exclusion exists in each county all over the world. Rural areas in China are suffering serious finance exclusion, such as finance density is low and uneven in different rural areas while some have little finance services which are called finance desert. At the same time the proportion of farmers and county rural areas obtaining loans are low. And county financial institutions are undergoing fierce drain of capital. Rural finance exclusion had profound influence on rural economy which seriously hinder harmonious development of rural society economy for it can't only lead to unbalanced rural financial development but also accelerate economic development polarization between different regions and groups. The consequences caused by rural finance exclusion have widely drawn attention from researchers and policy deciders. In order to realize inclusive growth in rural economy in China, the article proposed correspondent policy advice to reduce rural finance exclusion and establish inclusive rural finance system on the base of researching causes and results of rural finance exclusion.The article insisted on combining descriptive analysis and empirical analysis and combining qualitative analysis and quantitative analysis. We used literature research method, mathematic statistic method, econometric model method and comparison analysis method to analyze the current situation of rural finance exclusion, reveal causes and results of rural finance exclusion. The last part discussed the intervention path of rural finance exclusion in China. The research has drawn the following conclusions:(1)The present situation of China's rural financial exclusion. Through the present analysis of the rural financial exclusion in2009, We can see that the distribution of financial institutions are uneven in the country and every province and with the lower rural financial density, the much worse outflows of Rural capital, smaller proportion of rural loans, and farmers and small and medium-sized enterprise has much lower rate of accessing loans. And then this paper analyzed the Chinese rural financial exclusion convergence,with the help of σ convergence,β convergence and club convergence analysis ways and tested the key elements which impact rural finance with (3-convergence. The results show that:China's each county (city)'s financial exclusion generally characterized σ convergence and showed significant β absolute convergence characteristics. Controlled the location, the per capita GDP, urbanization ratio, education level, urban-rural income gap, information technology, employment and business environment, China's rural financial exclusion conditions showed β convergence; there were no club convergence in eastern, central and western regions, eastern and western regions show divergence, the central region showed convergence. (2)Triggers of China's rural financial exclusion.This article uses the data from the level of counties and then empirically analyzed the factors that affected the financial exclusion.The results show that:the per capita income, employment, education, commercialization, ratio of urbanization, government's support for economic development which represented the socio-economic characteristics and so on are higher, then the index of rural financial exclusion is much lower; With the gap of urban-rural income which represented the levels of inequality get higher, the degree of rural financial exclusion also get higher; the Use of information technology is higher, then the degree of the rural financial exclusion is much lower; the regions in the western, ethnic minority areas are more likely to suffer from a high degree of the rural financial exclusion.(3)Consequences of China's rural financial exclusion.This article empirically analyzed the relationship between rural financial exclusion and the productivity in China. The results show that, The rural financial exclusion is positive with productivity in China, use utility dimension of loan and the Contact dimension of rural finance products which were the composition of rural inclusive finance significantly contributed to productivity growth in rural areas, the other dimensions of which have different effects on the rural productivity; the effect of financial excluson on rural productivity in The central region is positive. This article empirically analyzed the relationship between rural financial exclusion and urban-rural income gap.The results show that, the expansion of rural financial exclusion increased the urban-rural income gap, and in the county (city) with a high proportion of non-agricultural industries,its rural financial exclusion inhibits the rise of rural-urban income disparities.Rural financial exclusion in the eastern and western regions will expand the urban and rural income gap. Rural financial exclusion in the central region was not significant. This article empirically analyzed the relationship between rural financial exclusion and farmers'income.The results show that the development of China's rural financial exclusion had a significant negative effect on farmers' income.Geographic penetration and Accessibility of Product which were component of rural financial exclusion are negatively related to household income, while the usage is positively related to household income whit the Reason lies that structure and function of rural financial is unbalanced in the county of China.. rural inclusive finance in the eastern had a negative relationship with household income while in the central and western regions it shows the positive correlation.(4)The path about the intervention of China's rural financial exclusion.This paper puts forward two aspects of the development of the village bank and the electronic financial services to interve the rural financial exclusion.Village bank play a positive role,but village bank also faced some troubles during it's development,This article empirically analyzed the factors which influence village Banks' site.The results show that: the per capita income, local fiscal expenditure, urban fixed asset investment, urbanization ratio, employment which represented the socio-economic characteristics and so on are positively related to location of Village banks' network. The added Value of primary industry which represented the advantage in competition are positively related to location of Village banks'network. Inaddition,the village banks prefer to establishing network in place which have high levels of information technology. Therefore, we should raise the policy to support the devolopment of town bank, and encourage its business in poor areas;At the same time we should develop the agricultural industry and focus on the cultivation and integration of large agricultural enterprises and also we should popularize information technology; Electronic finance could alleviate rural financial exclusion by providing convenient, affordable and accessible financial services in rural areas.The electronic financial service development mode of India, Kenya, Brazil and Philippines are worth to draw lessons from. In rural areas,the development of electronic financial services have cost advantages and technological advantages. Electronic financial service has good policy environment, economic environment, social environment and technical environment in our country rural area. In some rural areas,electronic financial service has also been successful in the promotion and application of.The development of china's rural banking and electronic financial services will reduce rural financial exclusion and promote to construct our country's rural inclusive financial system.