Study On Effect Of Formal Financial Credit For Family Farms In Henan Province

Industrial prosperity is the key to realizing rural revitalization.It is an important measure to build a modern agricultural industrial system,production system,and management system,to expand the main body of new agricultural operations,and to cultivate family farms.The family farm implement large-scale operation,which is essentially a capital-technologyintensive agriculture subject,and funding has become an important factor affecting the development of it.The demand for family farm funds is mainly based on the demand for productive funds.It has the characteristics of large scale and long term,which is difficult to rely on its own funds to solve the problems.And the formal financial credit have become the important sources for family farms.Rural formal financial institutions face the dual business objectives of serving the credit demand of “countryside,agriculture and farmers”and achieving financial sustainability,leading to a formal financial credit supply strategy for family farms that prioritize financial objectives and enforce binding policy objectives,which could be called goal-oriented supply strategy.And the rural formal financial institutions bear the responsibility of providing operating credit funds for family farms,meeting their credit demand,and promoting the development.What is the effect of formal financial credit on family farms under this situation? This issue is worth studying.The paper builds the theoretical analysis framework of family farm credit effect,and using the statistics data and survey data to analyze the current situation,credit status and the main problems of family farms in Henan Province.Secondly,using the survey data of family farms in Henan Province,theoretical analysis and empirical test on the formal financial credit outreach,availability,satisfaction and income effects of family farms.Based on the conclusion,evaluate the evaluation on the credit effect of family farm in Henan Province and summary the reasons.Finally,the paper puts forward the policy recommendations for improving the effect of formal financial credit on family farms,and provides a basis for improving the top-level design of formal financial credit for family farms.The mainly research conclusions in our study are as follows:(1)The family farms in Henan Province having rapidly increased in the number,have moderate operation scale,many of them produce food crops,with large production input,take family members as main labor force,preliminary highlights the business advantage.The demand for formal financial credit of family farms in Henan Province is strong.About 80% family farms have formal financial credit demand.The amount of credit demand is concentrated above 100,000 yuan.The credit demand period is characterized by short-term,medium-and long-term coexistence.Their formal financial credit approved proportion is relatively low,and formal financial credit mainly comes from rural commercial banks.There is a shortage of legitimate financial credit products that fit the needs of the family farm,and the family farm’s credit rating system,the family farm lacks the proper financial credit collateral,and the rate that family farms can afford is low.(2)The formal financial credit outreach of family farm in Henan Province is small.Establish the evaluation index system of formal financial credit outreach of family farm: outreach breadth(the number of rural financial institutions,the proportion of rural credit business,and the proportion of credit business),outreach depth(the distribution of credit amount and the proportion of credit amount).The score of formal financial credit outreach breadth of family farms in Henan Province is 0.3410(maximum value is 1),the score of outreach depth is 0.6690(maximum value is 2),and the score of outreach is 1.0100(maximum value is 3).The scores of formal financial credit outreach breadth of family farms in Xinxiang,Sanmenxia,Nanyang and Zhoukou are higher than the province’s overall score.The scores of formal financial credit outreach depth of family farms in Xinxiang,Sanmenxia,Nanyang,Zhoukou are higher than the province’s overall score.The scores of formal financial credit outreach of family farms in Xinxiang,Sanmenxia,Nanyang,Zhoukou are higher than the province’s overall score.Even the score of formal financial credit outreach breadth of family farms in Nanyang is the highest,and the score is only 0.4220,which means that the family farms in Henan Province have limited formal financial credit outreach breadth.The score of formal financial credit outreach depth of family farms in Zhoukou is the highest,and the score is only 0.9058,which means that the family farms in Henan Province have inadequate formal financial credit outreach depth.The score of formal financial credit outreach of family farms in Nanyang is the highest,and the score is only 1.3112,which means that the family farms in Henan Province have small formal financial credit outreach.(3)The formal financial credit availability of family farms in Henan Province is low,and the loan amount are concentrated in the range of 100,000-499,900 yuan.Among the family farms which have loan demand and also have applied for loans in the sample,only 38.84% of them are approved in 2015,the percentage of gain family farms is 39.61%,and the percentage of non-gain family farms is 37.50%.The proportion of formal financial credit availability of family farms is low.The loan amount of general family farms,grain family farms and nongrain family farms are all concentrated in the range of 100,000-499,900 yuan,the proportion of them are 56.69%,56.10% and 57.78%.The formal financial credit of family farms mainly come from rural commercial banks and many of them are guarantee loan.The employment experience variable is the common variable that affects the formal financial credit availability of the general family farms,grain family farms and non-grain family farms.The business feature variables of the family farm(acreage variables,total asset variables,agro-enterprise relationship variables,cooperative relationship variables,electronic commerce platform variables,settlement account variables),credit product supply of financial institutions(specialized credit product variables and credit issuing willingness variables)have certain extent affects on the availability credit in general family farms,grain family farms and nongrain family farms.(4)The satisfaction of formal financial credit of family farms’ operators in Henan Province is low.The percentage of dissatisfied with general family farms’ operators was 22.95%(including very dissatisfied and relatively dissatisfied).the proportion of satisfied is 30.16%(including very satisfied and relatively satisfied).The percentage of dissatisfied with gain family farms’ operators is 21.58%,the proportion of satisfied is 36.84%.The percentage of dissatisfied with non-gain family farms’ operators is 34.79%,the proportion of satisfied is 19.12%.The proportion of dissatisfied with gernal family farms’ operators is lower than the proportion of satisfied.The proportion of dissatisfied with gain family farms’ operators is lower than non-gain family farms’ operators’,the proportion of satisfied is higher,and the proportion of dissatisfied is higher than the proportion of dissatisfied.The proportion of dissatisfied with non-gain family farms’ operators is higher than the proportion of dissatisfied.Generally,the satisfaction of family farms’ operators is low.The loan procedure variable,loan amount variable,loan term variable and bank relationship variable are the common variables that affect the formal financial credit satisfaction of operators of general family farms,grain family farms and non-grain family farms.The model title variable and the total asset variable are the main variable that affects the formal financial credit satisfaction of operators of the general family farmer.The acreage variable is the major variables that affects the formal financial credit satisfaction of operators of the gain family farmer.The trademark variable is the major variables that affects the formal financial credit satisfaction of operators of the non-gain family farmer.(5)The amount formal financial credit has a significant positive impact on the income level of family farms in Henan Province,and the level of income effect for low-income family farms is highest.The amount of formal financial credit has a significant positive effect on the total income of general family farms,grain family farms and non-grain family farms.The acreage variable and total assets variable have significant positive effects on the total income of general family farms,grain family farms and non-grain family farms.The working experience variables and agribusiness relationship variables have significant effects on the total income of general family farms.The trademark variable has a significant positive effect on the total income of gain family farm.The short-term employment variables have significant influence on the total income of non-gain family farm.The impact of formal financial credit on the total income of the general family farms and grain family farms,with the increase of the quantile points,showes a “U” trend of left high and low right.The impact on the total income of non-gain family farms has shown a monotonous downward trend.In general,the effect of formal financial credit on the income of low-income family farms is at its highest level.(6)The formal financial credit of family farms in Henan Province is not effective.The demand for formal financial credit in family farms is strong,and credit can significantly increase income levels,especially for low-income family farms,where formal financial credit plays an important role in the development of family farms.However,the formal financial credit outreach of family farm is small,the proportion of formal financial credit availability is low,and the satisfaction of formal financial credit is low,indicating that the proportion of family farm credit demand has been satisfied is small and the degree is low,and credit has not been fully utilized to promote the development of family farms.Formal financial credit is not effective.In order to improve the formal financial credit effect of family farms,the paper proposes policy recommendations and countermeasures from the aspects of expanding the family farm credit supply,improving the family farm credit environment,improving the family farm’s ability to resist risks,and improving the farmer’s management ability.The specific measures are as follows: deepen the reform of rural financial institutions to expand the coverage of family farm credit,promote credit product(service)innovation to increase credit supply,build a credit system to improve the family farm credit environment,improve the family farm development environment to improve the ability to resist risks,strengthen family farm management and increase income.