The Analysis On The Behavior Selection Of Demand And Supply In Rural Finance

The biggest obstacle in rural financial reformation is the imbalance between supply and demand. It can deeply explore the way to solve the imbalance by using the basic idea and outline of Mechanism Design Theory to analyze the multiple stakeholders of rural financial market behavior based on self-motivated choice, thus to put forward proposal for perfecting Chinese rural financial system, which has certain theoretical and practical significance for the development of rural financial system.This article analyzed the main representations and reasons of the imbalance according to the current situation and intended to improve the imbalance and consummate rural financial system. A related restrictive mechanism model concerning behavior selection of demand and supply in rural financial market has been established based on the Mechanism Design Theory, the influences on the related restrictive mechanism variables would be analyzed, thereby recommend the policy recommendations further improved and perfected the rural financial market-related mechanisms, which promotes the matching. The policy and recommendations of promoting to match demand and supply in rural finance and perfecting the rural financial market-related mechanisms would be improved in this paper.In Chinese rural financial system, different demands have different characteristics. As a result of information asymmetry, the regular financial institutions are facing the problem of adverse selection; on the other hand, because of the low supervision cost of irregular financial institutions, the scope of the contract is huge and lack of regulation. In addition, it is essential for the government to get involved in managing and policy supporting because of the relevance of rural financial market and rural production. By taking measures such as optimizing information transmission mechanism, perfecting mortgage insurance guarantee mechanisms, it can improve the situation of imbalance of rural financial strengthen the support to "Agriculture, Countryside, and Farmer" through two aspects-information and incentive constraints.