Research On Farmers' Social Capital And Informal Borrowing Behavior

Traditionally, China is a relationship-based country, especially in rural China, the role of relational capital plays the most. Social Capital is not what we call the relationship capital in the strict sense, but its meaning can be more understanding from the perspective of relationships. Our study of social capital includes the dominant capital and implicit capital. The dominant capital includes the number of contacts with the farmers there, communication frequency, communication level and the level of difference. If we see the existing network of farmers around as a network, then this respectively, with the network size, network density, network level, network differences and network to the top. In addition to these, the social capital between farmers includes mutual awareness, mutual trust, awareness and participation in activities surrounding life and culture and so on. we set the assumptions and social capital indicators of farmers' social capital and do factor analysis and regression analysis. The results show that there is a big difference between farmers in the amount of social capital and the cumulative impact of household social capital factors are varied.In the conditions of the underdevelopment of the rural financial markets and the scarcity of credit funds, borrowing between farmers tend to have more blood, marriage partner. The family or village-based range of borrowing, one side is easily to solve the urgent needs of fanners, the other side is low default rates because of the moral constraints. And through research we found that a number of people have more social capital, the greater the likelihood of occurrence loans. The accumulation of social capital status of farmers is bound to profoundly affect the scope of their credit sources, credit cost, the size of credit and credit limit and so on. With the economic development level, household quality and structure of social capital has changed, the farmers gradually break the traditional relationship to blood, the network is characterized by geographical scope, farmers gradually expand the circle of life, fonned a business edge characterized by a new communication network. The result of this change is the reduction of strong relationship and the increase of weak relationship between farmers. So the informal borrowing and borrowing lost the natural moral restraint mechanism, there is adverse selection and moral hazard, we found that the amount of social capital accumulation occurs on the loan probability of loan size, loan purpose to some extent.This study is divided into three parts:farmers'social capital accumulation and influencing factors, informal borrowing practices and the impact on household borrowing behavior owe to the farmers'social capital accumulation and trends. The third part have done a correlation analysis of the two, the first is farmers' social capital accumulation on the impact of the informal borrowing practices, and the second, changes in household structure, social capital informal borrowing behavior trends. The existence of the financial risk, coupled with the use of loan funds by the life form gradually shift to the production, the consequences of the informal loan is from relief of credit gradually to human credit business credit profit, from implicit debt of gratitude to gradually dominant commercial interest, so, we can put forward some policy recommendations.