Consumer Credit Effect Research

In recent years,Shaanxi Province’s economic achieve so much development progress. However, unlike other developed provinces such as the most development province Guangdong, Shaanxi Province’s overall economic strength is not strong.One of the most important reason is that residents’final consumption rate is not very high and the role of consumption in boosting the economy has not been fully realized.As a powerful tool,consumer credit can not only expand consumption,reduce savings and improve the social marginal propensity to consume,but also optimize the asset structure of financial institutions.But if the development inproperly,it would transfer a false signal of demand to the market,which will lead to unusual fluctuations in the economy and crowding-out effect on economic growth.On the basis of the theory,this paper makes Guangdong province as a reference object and does the empirical research to measure the direction and size of consumer credit.Consumer credit in Shaanxi and Guangdong provinces have played a catalytic effect and the effect of consumer credit in Guangdong Province is higher than that in Shaanxi Province.Further comparison analysis obtained the reason,such as the low level of consumers’ income,the high expectations of future expenditures,the lack of operational level as well as the imperfect laws and related intermediary institutions.All these reasons restrict the development of consumer credit in Shaanxi Province.After the analysis,this paper puts forward recommendations to promote the development of consumer credit in Shaanxi Province.Shaanxi Province must raise the level of income,improve the social security system and narrow the income gap;enhance innovation,enrich the types of consumer credit,improve risk management system and enhance the business operations of financial institutions level;establish the most appropriate personal credit system, legal system and consumer credit guarantee system for market demand.Ultimately,this paper concludes that Shaanxi Province must develop consumer credit correctly,which will play a tremendous stimulus to Shaanxi’s economic.