The Performance Study On The Group-Lending Mechanisms Of Farm Households In Microfinance

As a unique way of rural financial services, the group-lending mechanisms of farm households in microfinance, by the way of its joint liability, not only help farm households without any collaterals get access to credit for farming operating, but also help bank institutions reduce the credit risks and obtain more profit. Since the 90s of last century, successful practise of the group-lending mechanisms of farm households in microfinance in some areas in China, this mechanisms have become to the key of solving "three dimensional rural" issues, formal financial institutions have played a particularly important role. Therefore, the performance study on the group-lending mechanisms of farm households in microfinance, including the operating status of the bank institutions, its sustainable development capacity, the improving situation of farm households' welfare and so on. So as to find out the factors that restricted the performance of the group-lending mechanisms.First, from the point of " demand occurs",the paper describes the formation of farm households' group-lending mechanisms. Then,the paper describes the operation of farm households' group-lending mechanisms in terms of peer select, peer monitor, collateral replace, peer repay and win-win for all. It proved that the group-lending mechanisms was good to achieve financial institutions' profit and sustainable development goals and satisfy farm household' credit needs and improve theirs welfare in theory.Secondly, in order to analyze the performance of group-lending mechanisms more objectively, using Analytic Hierarchy Process ("AHP"), this paper, both from the point of farm households and financial institutions, designed the index system of the performance evaluation and determined the weight of each index.Thirdly, using field survey data in Ningyang County and Daiyue District, by timing sequence compared and regional compared, the paper calculated each index's value and analyzed the performance results and its influencing factors. Main findings of the results are two. The timing sequence analysis showed that the performance level of financial institutions was improved year by year, and its weak showed index included the security and the sustainable developmental capacity. The results of regional compared, in 2009, Ningyang County had better performance than Daiyue District both in the point of financial institutions and the farm households.Finally, based on the main findings, the paper try to give some measures to optimize and improve the group-lending mechanisms of farm households in microfinance.