Study On The Impact Of Pro-poor Microcredit Policies On The Income Of Farm Households Moving Out Of Poverty

Eliminating poverty,improving people’s livelihoods and realizing common prosperity are the fundamental goals of socialist modernization with Chinese characteristics,and they are also the goals that the Party and the State have always pursued.China’s anti-poverty path from relief-type poverty alleviation to development-type poverty alleviation to precision poverty alleviation is both in line with China’s national conditions and provides valuable experience for the world’s poverty reduction.However,poverty alleviation is not the end of the road.How to consolidate the results of poverty alleviation in poverty-stricken areas and promote the connection with rural revitalization,narrow the development gap between poverty-stricken and non-poverty-stricken areas,and build a long-term mechanism to solve the problem of relative poverty,so as to gradually achieve the goal of common prosperity,is not only a major strategic connection to be implemented during the important historical interchange period,but also a necessary path to build a moderately prosperous society in all aspects and realize the modernization of agriculture and rural areas,and is also a proposition of the times to which academics pay attention.It is also a proposition of the times that the academic community is concerned about.Microcredit for poverty alleviation among farmers is not only an important policy and financial tool for financial poverty alleviation in the period of poverty alleviation,but also an important policy tool for improving the income of poverty-eradicating households,broadening the channels of income increase,and narrowing the income gap in order to realize the common prosperity in the stage of relative poverty management in the future.However,how to provide sustainable financial services for low-income groups,this "sustainable" on the one hand,is to provide affordable financial services for low-income groups,on the other hand,is to have the effect of continuity,to avoid out of poverty and back to poverty.The following questions need to be clarified: how to construct and scientifically evaluate the theoretical framework of the impact of pro-poor microcredit policies on the income of farm households that have escaped poverty? Does pro-poor microfinance produce income-generating effects as expected? What are the differences in the impacts on different sources of income of farmers?Has pro-poor microcredit improved the income structure of poverty-stricken farm households?Can it reduce the income gap within the poverty-stricken households?In view of this,on the basis of systematically sorting out the history of the transmutation of China’s poverty alleviation microcredit policy,and taking L County of Henan Province,a key county in the national rural revitalization support,as an example,we describe the specific practice of poverty alleviation microcredit and the current situation of income of poverty alleviation farmers in the sample area,analyze the main problems,and construct a theoretical analysis framework of the impact of poverty alleviation microcredit policy on the income of poverty alleviation farmers from the micro-farmer’s point of view based on the theory of feasibility,the theory of the cycle of poverty,the theory of financial anti-poverty,the theory of income of farmers and the theory of credit subsidy.Based on the theoretical basis of viability theory,poverty cycle theory,financial anti-poverty theory,farm household income related theory and credit subsidy theory,we construct a theoretical analysis framework of the impact of poverty alleviation microfinance policy on the income of poverty alleviating farm households,and use all the data of poverty alleviating households in L county of Henan province from 2021 to 2022,and comprehensively apply the Heckman two-stage model,PSMDID model,RE model,2SLS model,OLS model,individual fixed-effect model,two-way fixed-effect model,and two-way fixed-effect model.effect model,two-way fixed effect model and other methods,on the premise of empirically analyzing the availability of credit to poverty-stricken farmers and the main influencing factors,empirically test the mechanism and heterogeneous effects of pro-poor microcredit policy on the income growth,income structure and internal income disparity of poverty-stricken farmers,in order to evaluate the effect of the implementation of the policy,and to successively promote and improve the pro-poor microcredit policy,so as to improve the growth and quality of the incomes of low-income farming households and Provide theoretical basis and policy reference for realizing the goal of common prosperity.The main findings of this paper are as follows:(1)A combination of factors based on the personal characteristics of the head of household,family characteristics and geographic location determines the pro-poor microcredit behavior of rural households.The empirical results show that when the head of the household is a woman,it is easier for poverty-eradicating households to obtain microcredit,and the amount of microcredit loaned will be higher.Regardless of the type of insurance,those who have the behavior of participating in the insurance are able to obtain a relatively high amount of loans.Those with special hardship dependents in their households are less likely to receive loans.Households of poverty-stricken households that enjoy the minimum subsistence guarantee for rural residents are able to obtain a lower amount of loans.Poverty-stricken households that are members of farmers’ professional cooperative organizations are more likely to have access to microcredit.On the other hand,the amount of microcredit received by households that have joined professional cooperative organizations is lower than that received by households that have not joined such organizations.Poverty alleviation microcredit is more likely to be available to poverty alleviation households with members who work outside the household.The larger the household’s cultivated area,the more likely it is to receive microcredit and the more it is likely to lend.Differences in household human capital,physical capital and social capital also lead to differences in the availability of pro-poor microcredit to different households.In sum,the three levels of influencing factors,namely,personal characteristics of the head of household,household characteristics and geographical location,play different roles at different stages of the availability of pro-poor microcredit for povertyeradicating farm households.(2)Pro-poor microcredit policies have the effect of increasing the income of farm households.Pro-poor microcredit has a stronger effect on increasing the income of households that are less likely to go out to work during the year,and the policy is more effective.For farmers who have the capacity to develop but lack arable land,the marginal utility of microcredit is higher,and pro-poor microcredit plays more of the role of "sending carbon in the snow" than that of "adding flowers to the flowers" in the case of traditional credit.The intent of poverty-alleviation microcredit is to guide farmers to use the loans they receive for production development,to continuously improve their own production and management capacity,and to form a virtuous cycle of "capital production-enhanced production capacity-improved living standards",thus promoting sustainable income growth and reducing the risk of returning to poverty for households that have been lifted out of poverty over the long term.Therefore,whether it is due to the poor subjective initiative of their own production or limited objective production conditions,it is more effective for those poverty-stricken households with relatively low production and management expenditures to use poverty-alleviation microcredit to realize an increase in their household income.In addition,the effect of pro-poor microcredit on income generation is different for households with differences in different aspects of agricultural production.The effect of propoor microcredit is stronger and better for those households that have fewer resource endowments for production and lower operating expenditures on agricultural production.In contrast,pro-poor microcredit plays a greater role among those households that lack human capital,and financial funds play a certain role in supporting the weak,while households rich in human capital are relatively less reliant on pro-poor microcredit for income generation.Propoor finance plays a stronger role in promoting poverty eradication among households with less arable land.For households that lack arable land,the amount of human capital in the household does not have a significant effect on income growth,but for households that are rich in arable land,it does have a significant effect,as abundant human capital gives households the ability to make better use of their endowment,and the more land they have,the more people they have,and the higher their income.Pro-poor microcredit is more effective in promoting income growth for households with low productive expenditures.(3)The pro-poor microcredit policy can significantly affect the income structure of farm households.Households with access to pro-poor microcredit show higher absolute and relative values of wage income and absolute and relative values of productive income.Among the income differences between the two types of households,the difference in wage income accounts for the highest proportion of the total household income difference,amounting to64.31%,indicating that wage income plays a major role in widening the income difference between these two types of households.This is followed by the share of the difference in productive income,which is 37.84%.The difference in property income accounted for 2.20%of the total income difference,while the difference in transfer income accounted for-4.36%,i.e.,transfer income instead narrowed the income difference between these two types of households.After using the 2SLS model to mitigate the endogeneity problem,the empirical results show that pro-poor microcredit has the most significant impact on productive income,and it will also significantly increase the household’s property income and transfer income,and at the same time,it will lead to a significant decline in wage income,and for the structure of income,it raises the proportion of productive income and property income in the total income of the household,and the proportion of wage income decreases.Pro-poor microcredit has helped households to shift from the traditional patterns of transfer income and wage income to more stable and sustainable production and business activities,thus improving the economic status of households.(4)The pro-poor microcredit policy can play a significant role in regulating income disparity within farming households.Using the Gini coefficient to measure the income gap within farming households,the sample is divided into five groups of income levels,namely,low,medium-low,medium,medium-high and high,and the results show that the income gap within farming households is greater at lower income levels,and that this gap gradually decreases as incomes rise,and that the distribution of income within medium-income and medium-high-income villages is relatively balanced,with a smaller income gap.The results of the empirical test show that,in general,there is a positive relationship between the increase in the scale of pro-poor microfinance and the widening of income disparity within farm households,and that the coverage rate of pro-poor microfinance does not have a significant effect on the widening of income disparity within farm households.Further sub-sample analysis at different income levels shows that for the lower middle-income and middle-income groups,the expansion of pro-poor microcredit significantly widens the internal income gap,and this effect is most significant in the lower middle-income group.For the low-and middleincome groups,the increase in pro-poor microfinance coverage contributed to the widening of the internal income gap,although its effect was relatively weak.Meanwhile,for the middleincome group,the increase in pro-poor microcredit coverage also significantly widened the internal income gap,with a stronger impact.In the middle-and high-income groups,the increase in pro-poor microcredit coverage significantly narrowed the internal income gap among farm households.Taken together,the impact of pro-poor microcredit coverage on internal income disparities among farm households shows an "inverted U" trend of first widening and then narrowing as income levels rise.Based on the conclusions of the above study,this paper puts forward policy recommendations in terms of continuing to implement pro-poor microcredit policies to improve the availability of credit for poverty-eradicating households;promoting "integration of production and lending" to stimulate the endogenous motivation of poverty-eradicating households to increase their incomes;establishing and improving the supporting mechanism for poverty-eradicating microcredit;improving the penetration of poverty-eradicating microcredit products and services;and adopting a differentiated policy for poverty-eradicating microcredit in an attempt to provide certain lessons for the realization of the common prosperity.