Effect Of Rural Microfinance For Farmers’ Income In Hebi City Of Henan Province As An Example

With the income gap between residents of rural areas and urban areas become bigger and bigger, income of rural areas has been paid close attention by the authorities in both home and abroad. Our country in return published "No.1document", which proposed solutions to "three problems in rural areas", and stressed the construction of rural finance market. Small rural credit, an important finance tool played an irreplaceable role in increasing income of rural residents. Small rural credit, developing in China for twenty years, solved many problems like high transaction fee, unbalanced information during their lending, and increased income of rural residents, this in return, developed small rural credit to a mature system. But the imperfect risk mechanism of small credit and lagged behind management mechanism in the development process made it difficult to improve the income of rural residents.Small rural credit is a main way to solve capital shortage. It can also increase rural residents’income, and in the same time, promote the development of rural finance market. In this thesis, the author found that small rural credit has transformed from a poverty relief tool to a new increasing income tool through analysis to the impact of rural credit in increasing farmer’s incomes. Rural credit cooperative played an important role in the process of credit delivery, it broken the traditional loan credit mechanism, and it has its own special operating credit mechanism in target object, credit line, delivery method etc. Rural residents mainly pay their attention to change their production factors and mode of producing. Small credit line realizes its goal to increase rural residents’income mainly through building installment payment mechanism and incentive mechanism. However, Chinese small rural credit do exist some problems. The unsound credit risks of small credit and the lagged behind management made our rural finance market unstable. In this thesis, the author use Hebi city of Henan province as an example to analysis the impact of small rural credit in increasing income of rural residents. Through building multiple regression model, the author found that small rural credit promote agricultural income and non-agricultural income. In the last, according to empirical analysis and theoretical analysis, the author put forward some good suggestions to better develop small rural credit and increase the income of rural credit.