Complementarity And Coordination: A Study On The Relationship Of The Western Rural Non-formal Financial With The Formal Financial

China's western rural areas in the economic system reform and the western development policy of promotion, have been gradually emerging from poverty and backwardness of the situation, and the rural economy has been vigorously developing. Economic development needs the support of funds, and funds owned by the farmers is limited. Becourse of funds for supporting agriculture policy coverage of the narrow, formal financial institutions for lower costs and risk diversification consider reduce the capital investment in the rural areas, and these factors have limited the west farmers from the formal financial channels of access to finance the amount. Faced with development opportunities, farmers have through non-formal financial channels for financing, and non-formal financial phenomenon is widespread in the vast western rural areas. Based on supply and demand in the western state of the rural financial analysis, we point out that the formal financial shortage of supply is the deep-seated reasons for non-formal financial formation.Compared to formal financial, the financing costs, the availability of funds and loans, and other related formalities of non-formal financial services are the comparative advantages, and the non-formal finance are widespread and growing scale in the western rural areas. To promote rural economic development of the western region, the non-formal finance are becoming a irreplaceable role. And formal financial services in western rural areas, with well-funded and ensuring the supply of loans during the the building has been the mainstay of the rural economy. This paper separates the role of non-formal and informal financial in the western rural and analysises that the two work together to promote the western region of rural economic development.Demestic scholars have different understanding market impact of rural non-formal financial and the formal financial. Some scholars believe that the existence of non-formal financial disrupt the financial market order, other scholars believe that the existence of non-formal financial is a useful supplement to enhance competition, and improve the financial system. Basing on the actual situation in the western rural areas, the advantages of the non-formal financial in the western rural economic development and improving the living standards of farmers outweigh the disadvantages. To actively guide and reasonable use, non-formal and formal financial are complementary and coordinated development in western rural finance in promoting the process of economic development.