A Study On Operation Performance Of Rural Fund Mutual Cooperative In Sichuan Province

Rural financial reform is one of the key measures to develop rural economy and to promote its sustainable development. The foundation of rural financial system is cooperative financial organization, and the experience of developed countries had proved that it is necessary to develop rural financial cooperative organization to drive the rural economy. However, there is no authentic cooperative financial organization in China; rural cooperative finance is insufficient in most rural regions. As a kind of operating form of cooperative finance, with both economic and social benefits, micro-credit is becoming more and more popular in China. Rural fund mutual cooperative is a new mode of micro-credit. Compared with the other rural financial institutions, the rural fund mutual cooperatives constituted on farmers’free will is one kind of farmers’own economic cooperatives with Chinese characteristics and in line with China’s national conditions. They are powerful supplementary of Chinese rural financial system.This paper uses Rural Financial Theory, Cooperative Financial Theory, Financial Restraint and Financial Deepening Theory, Poverty and Anti-poverty Theory for reference. Firstly, this paper descriptive statistically analyzes the development status of rural fund mutual cooperatives in Sichuan Province. Secondly, this paper, from the rural fund mutual cooperative perspective, adopts Yaron’s rural financial institutions performance evaluation framework to analyze its self sustainability and coverage. Thirdly, this paper use Probit model and Logit model to analyze the influencing factors of associates’ credit availability from the peasant household. At last, some suggestions are given in accordance to the conclusions.The main conclusions of this paper are as follows:(1) Rural fund mutual cooperatives have activated rural financial market and filled the gaps in rural financial services, extended the financing channels of the poverty effectively, increased the farmers’ incomes, and pushed the process of the regional new rural communities construction accelerative. However, rural fund mutual cooperatives have to face some challenges. Such as small-scale of capital, narrow business scope, few target customers, insufficient promotion and low professional qualities of managers.(2) The subsidy dependence index indicate that Yimin rural fund mutual cooperative can sustainably develop itself without any subsidies only by increasing its loan interest rate to67.84%,13.23%,10%and10.43%. Moreover, most mutual fund organizations in poor village with anti-poverty orientation, have already realized sustainable self-development. Decreasing subsidy dependence index demonstrate that rural fund mutual cooperatives have improved their self sustainability significantly.(3) Tax preference policy and risk reserves withdraw policy significantly affect the self-sustainability of rural fund mutual cooperatives; it is impractical to improve the capacity of self-sustainability by changing the items, such as loan interest rate, loan recovery and scale of asset.(4) Compared with other financial institutions, rural fund mutual cooperatives have obvious advantages in information and cost. The scope, depth and quality of their financial services are increasing year by year.(5) The results of quantitative analysis reveal that farmer’s credit availability are affected by eight factors, such as whether the householder is village cadre or not, whether the households are poverty families or not, community traffic situation, the number of livestock fed by farmers, migration situation of family members, productive fixed assets, areas of contracted land owned by the households, educational situation of the householder. The loan amount of peasant households are affected by four factors including whether the householder is village cadre or not, whether the households are poverty families or not, community traffic situation and the number of livestock fed by farmers.Based on those conclusions, some suggestions are given in the following. First and foremost, the related policies, rules and regulations should be adjusted immediately according to the present economic situation in rural areas. The PBC and its branches should give more guidance and assistance to rural fund mutual cooperatives. What’s more, it is important for rural fund mutual cooperatives to strengthen promotion to increase the level of farmers’perception and acceptance, enhance the exchange of experience among different regions. Last but not least, rural fund mutual cooperatives must establish and perfect a talent mechanism which is suitable for its own characteristics and improve the credit availability of their numbers by using different kinds of channel.