Inhibition Of The Financial Development Of Our Rural Folk, From The Supply Of Rural Financial

The supplying financial repression is ubiquitous in rural areas, the people in country, either farmer or rural small or medium-sized enterprises, their demand for capital of their living or producing can't be satisfied. So, private finance is their inevitable choice, It can be say that private finance is a inferior choice to satisfy themselves demand of capital in this situation of absence of formal financial supply.Listing all kinds of the supplying financial repression in country, then, using regression to analyze the supplying factors that restrict rural economic main bodies'demand of capital, so they can't be satisfied from the formal financial system. This paper draws a conclusion that private finance is very important to main body of Chinese country.This paper analyzes the characteristics of its development and the reasons of forming and developing of private finance, points out the reasons that private finance can develop in Chinese country, it is because of its unique priority comparing to formal finance, the lack of formal finance is the reason leading to. Using pareto optimum theory, this paper also analyze it is favorable to a tri-party: government,the main body of rural economy and formal finance(mainly the Rural Credit-Cooperatives(RCC)), it is unassailable that private finance is benefit to rural economy, the key point is the attitude that government takes.Following, this paper analyzes the factors that block the development of private finance, for example: market admittance system, property right system and market supervision system, points out these are the main factors that block private finance to develop, but, meanwhile, the private fiancéitself has some disfigurements, for example: imperfect organization, informal agreement. This paper also analyzes the high rate which affects the development of rural private finance, with analyzing the high interest rate we find it is not the fault of private finance, it is because of the interest rate restriction, trade-oriented transformation and more risks that private finance is facing which compares to the formal finance.At last, aiming at these factors which block the development of private finance, this paper put forward some advices: building up the market admittance system of private finance, rational property right system, perfect supervising system, private financial assurance system, market-oriented interest rate, etc. at last, this paper analyze the possible directions of private finance develop.