Rural Credit Guarantee Institutions Operating Efficiency Research

In the rural credit guarantee market, there exist some problems such as the poor quality of credit property in rural financial organizations, the difficulty of developing credit services in rural area and collecting fund by rural economic subject, which are the result of the guarantee restraints. Constructing credit guarantee system and introducing the third party guarantee as a bridge between the rural financial institution and the rural economic subject will help to ease the difficulty of collecting fund for the farmers and small and medium-sized enterprises. As a microsubject in the rural credit guarantee system operation, the rural credit guarantee organization is also an important part of social credit system.Thus, its consistent operation provides the foundation for the leverage of the rural credit guarantee system and ensures the improvement of social credit system. Therefore, the systemic survey on the rural credit restraints and the analysis on the operation efficiency of the existing rural credit guarantee organizations will provide the theoretical basis and practical experience to construct the proper rural credit guarantee system.With Fujian Province as the study subject, the thesis starts with the analysis of the guarantee restraints on standard fund collecting to have a clear picture of the present situation of credit guarantee industry in China and Fujian Province. Then taking advantage of the experience of transitional economic countries in Central and Eastern Europe for reference, the thesis makes the analysis and estimation on the operation efficiency of the rural credit guarantee organizations in the method of Data Envelopment Analysis (DEA). The thesis also employs Tobit regression model to find the elements affecting the operation efficiency of rural credit guarantee organizations. After that, the policy proposals to improve the operation efficiency of rural credit guarantee organizations are put forward in the thesis.The main conclusions in the thesis are as follow:First, the financial contract is restrained by the natural risk and credit risk caused by the asymmetric information of both parties in rural financial market. Usually the rural financial organizations grant the loans to rural economic subjects in the manner of guarantee loan to decrease the risk of default. However, some elements such as the rural industry vulnerability, poor property state and unclearly-indentified property right, no trade fair for collaterals, and high trading cost, etc. make it difficult to ask for a loan for the rural economic subjects. The analysis of model shows that the construction of the rural guarantee organizations will relieve the guarantee restraints and reduce the difficulty of collecting fund for the rural economic subjects.Second, the complete survey on the operation of the rural credit guarantee organizations in Fujian Province displays that the construction and rapid development of the rural credit guarantee organizations help to relieve the funds shortage for the rural economic subjects in some extend. Meanwhile, there exists some problems in the process of operation. The problems are:for the rural economic subjects, limited guarantee capitals and small scale of credit coverage can’t meet their needs; Security magnification is too small, weak expansion of credit; there is no risk dispersed mechanism; it is lacking in government regulation and industry standards, so on and so forth.Third, the complete survey on the operation of the rural credit guarantee organizations in Fujian Province also displays that the local government policies have great impact on the development of the rural credit guarantee organizations, resulting on the difference among the districts. In some districts, there are excessive amount of the rural commercial credit guarantee organizations, some of which offer irregular operations. In the meantime, the rural credit guarantee organizations in different models vary in their target, organization nature, social position and benefits pursued. As a result, mutually-owned organizations are in good operation, but commercial and policy ones are not.Fourth, various researchers put forward a lot of methods, like financial ratio analysis, return value assessment and input output method to measure the operation efficiency of the credit guarantee organizations. However, the sources of data and the inaccuracy of the figures, substitution problems and fuzzy contribution make it much harder to measure the operation efficiency than to analyze their content and structure.Fifth, the thesis makes an assessment on the operation efficiency of the rural credit guarantee organizations in Fujian Province in2008in the method of DEA and finds that the operation efficiency are generally poor and there are great difference among the organizations. And that is the case with the organizations in different models. The mutually-owned organizations are more efficient than the commercial and policy ones, especially when making full use of the available resources. Thus, the mutually-owned organizations possess the dominant position in the credit capital operation.Sixth, the thesis applies Tobit regression model to the positive analysis on the influential elements on the operation efficiency of the rural credit guarantee organizations. It is found that the organization model, the ratio of premiums revenue in gross revenue, the age history of the organization, guarantee rate, the scale up by guarantee agreement, the loan-deposit ratio in financial institutions, and the percentage of industrial output value in GDP have great impact on the operation efficiency of the rural credit guarantee organizations.Seventh, the analytical study on the rural credit guarantee schemes of four transitional economic countries in Central and Eastern Europe provides much valuable experience for China in many aspects such as the clear position of Rural Credit Guarantee Schemes, the proper government support system and good cooperation among the financial institutions.Eighth, Based on the survey and positive analysis, the thesis put forwards a proposal that the rural credit guarantee system should be mutual guarantee-centred with the auxiliary of the commercial and policy credit guarantees. The diversified system will help to guard against and reduce the risks. Meanwhile, the government policy guidance and supervision should be fully played to ensure the sound development of the rural credit guarantee organizations, and to construct a positive cooperation between the rural credit guarantee organizations and the financial institutions.