Research Of Personalloan Activities In New Countryside Communities

Nowadays, normal finance organizations provided far less enough finance support in the countryside. Loan demand for most farming family was not satisfied, and in some area, the syphonage phenomenon occurred as fund collected by normal organizations in the rural flowed into the urban area in pursuit of profit. To solve the loan problem in rural area, the first priority was to understand the affecting factors of farm loan. In the New Rural Communities, traditional agriculture was not the only way to gain income. Supported by finance organizations, more and more farmers would work in the cities or being engaged in self-employed business.This paper tried to locate the problems and the characteristic of loan borrowed by residents in the New Rural Community of LongtanTongle Chenghua District. Multiple research ways as questionnaire, statistical analysis and field survey have been used throughout the paper. Comparing the loan characteristic ofthe New Rural Community residents with the traditional farmers, the similarities and differences has been spontaneously examined and specific solutions to the current situation have been put forward.After questionnaire and field survey research, below discovery has been made:There is robust demand of loan fund by resident of the New Rural Community. However, their loan mostly sourced from individuals as well as the informal financial institutions. Production expenditure was the most common use of the loan credit. Further investigations haveidentified the reason of why the loan mostly came from individuals and informal financial institutions. Firstly, the ordinary farmers were not familiar with the policy relevant in formal financial institutions. Then, the inconvenient procedure scared the farmer away from the door way of formal financial institutions. And thirdly, the farmers could not provide qualified property guarantee or find a proper guanrantor. And last, the interest rate, mostly valued by the community residents, was higherin formal financial institutions.Comparing the loan characteristic of the New Rural Community resident with the traditional ones, which was summarized by reviewing tons of documentand literatures of huge quantity, several similarities would be found:The loan fund demand was so vigorous, the inconvenience to loan from formal financial institutions, the popularity to borrow money from individuals, the ignorance of formal financial institutions policy and thein sufficiency of proper guarantee. And the difference lied as follow:The access of the loan fund, the upper limit of the loan, the loan interest, the loan dead line and the loan procedure.Loan problem among residents in Tongle district:Loan demand in Tongle was not fully satisfied. The farmers had little appropriate guarantees as well as the deficiency of understandings in policies of formal financial institutions. Normal finance organizations provided far less enough finance support and insufficient financial product in the countryside.Counter measures and suggestions:Suggestions and strategies should be made from the two aspects of demand and supply. The demand aspect:effectively distinguish the loan demand from the residents, to aspire more rationality in loan from community residents, to establish an insurance system for the farming residents. The supply aspect:to aggravate innovations in financial service, to push forward formal financial institution reform, to reduce the barrier for civil capitals to enter the community, to restrain the capital flight of community fund.