A Study On The Duality Of Urban And Rural Finance In Ethnic Areas

In our country, urban-rural financial duality has a close relationship with urban-rural economic duality. Currently, ethnic minority areas also face severe economic duality between urban and rural, correspondingly, the gap between urban and rural financial development continues to widen inevitably, and urban-rural financial duality further strengthen the urban-rural economic duality. In order to promote the sustainable and healthy development of economy in ethnic minority areas, we must face up to urban-rural financial duality, recognize the gap between urban and rural development, and create conditions to weaken urban-rural financial duality, so that we will realize balanced economic and financial development between urban and rural areas. In this dissertation, on the basis of the relevant theory the relation between economic duality and financial duality is discussed. Firstly, the paper defines the concept of urban-rural financial duality, based on the relevant data of economic and financial development from seven provinces in 2003-2012, this dissertation analyzes the current situation of urban-rural financial duality from three dimensions, which lies in difference of financial assets scale, the FIR, and financial efficiency, then summarized the characteristics of urban-rural financial duality; secondly, the paper analyzes the causes of urban-rural financial duality from different angles, the paper systematically analyzes the causes of urban-rural financial duality in ethnic minority areas from endogenous angle and exogenous angle, synthesizes differences in economic development, industrial characteristic differences, financial system, location factors, as well as the ethnic cultural values; Finally, the paper gives suggestions for weakening urban-rural financial duality of ethnic minority areas.The results show that urban-rural finance duality reflect in three aspects, the size of financial assets, economic financialization level and financial efficiency, but compared with other provinces and national average, urban and rural differences in the size of financial assets is not obvious, and rural finance duality is mainly embodied in difference of the economic financialization level. Second, the urban-rural financial duality causes are manifold. In endogenous factors respect, first of all, the economy is the foundation of finance, urban-rural financial duality is mainly from the duality of economic; secondly, the natural defect of traditional agriculture makes farmers in ethnic minority areas less effective financing needs, eventually lead to the rural financial repression in minority areas. On the one hand relative to the limited financing needs, the supply of rural financial resources is surplus; on the other hand the limited financial transaction size is difficult to support the development of a modern financial system in rural areas. Third, exogenous factors causing urban-rural financial duality in minority areas are reflected in, first of all, macro financial system of our country and financial institutions’micro institutional arrangements strengthen the urban-rural financial duality; secondly, the special geographical conditions of the region makes the a large number of financial institutions withdraw from rural areas, as a result rural areas are faced up with serious financial desertification; disadvantaged rural location on the inaccessible rural areas resulting in higher borrowing costs, and the resulting financial geographic exclusion, the financial needs of farmers are not met; and finally, the concept of national culture differences is also an important factor in the urban-rural financial duality formation. On the one hand, affected by the national customs and religious beliefs, many farmers exclude financial activities, on the other hand, the weak financial consciousness of rural residents and the poor credit environment in minority rural areas also hinder the development of rural finance, exacerbate urban-rural financial duality. Fourth, the paper concludes with governance measures for urban-rural financial duality in ethnic minority areas, include building up systematic thought, establishing mechanisms for urban and rural unification; developing modern agriculture to consolidate the basis of rural economy, narrowing the gap between urban and rural economic development; accelerating rural financial reform, and optimizing the external environment of rural financial development.