A Research On The Risk Prevention Of Lishui Rural Financial Reform

Rural finance is the core of the modern rural economy. In order to co-ordinate urban and rural development, narrowing the gap between urban and rural, we need developed rural financial deeply. At present, the structure of the rural financial system of China has serious defects:it lacks financial service, the channel to get loan is narrow, it lacks of effective external benign competition as the rural credit cooperatives are the strongest, these caused a less sensitive reaction to the rural finance demand, the financial supply and demand is asymmetry and it is unable to meet the farmers’demand. This restricted the rapid development of the rural economy. Faced with this situation, Lishui rural financial reform emerges. But the implementation of the measures will often bring potential risks, the risks will hinder reforms, so that the effect of reform will be influenced and it will also influence it’s spreading nationwide. Therefore, it has more theory and practical significance to select one of the ten financial reforms--Lishui Rural Financial Reform as the topic. It studies the causes of the risks and how to take precautions against the risks of rural financial reform.The paper firstly introduces the background and significance of topics, and then summarize the related researches both at home and abroad from the next three aspects:the causes of rural financial risks, the prevention and solution of rural financial risk as well as the relationship of rural financial reform and risk control. It then introduces the framework, content of this article, research methods and possible innovation and so on. The main content of this paper is the analysis of the risk of Lishui rural financial reform and risk prevention measures. This chapter makes innovations by studying the potential risks of this dynamic process of rural financial reform, and based on this analysis, it puts forward some relevant risk prevention and control measures. Prior to this chapter, the paper does a simple narrative of the relatitive theory of rural finance and characteristics.As to the risk analysis of Lishui rural financial reform, this paper firstly describes the situation of Lishui rural financial reform through on-the-spot investigation method. Then it uses the theory analysis-the method of game theory to analyse rhe stakeholders of the rural financial reform. It shows that the imperfection of laws and regulations will lead to the noncooperation between farmers and rural financial institutions. After that, it uses the quantitative analysis method to analyses the reasons of the risks of Lishui rural financial reform from the following six aspects: It lacks the relevant laws of the loan by mortgage with forestry property, It’s hard to evaluate the value of the farmer house and it’s also hard to sell, there are some backwards of the bank card service, rural credit evaluation does not show the real situation, the new kind of rural financial organizations lacks of supervision, and the fiscal incentive is invalid. Based on the above analysis of potential risk causes, it puts forward six strategies:Establish a sound rural financial service regulation system; improve the intermediary service system; improve the rural financial institutions in their own construction; strengthen the external supervision; intensifying propaganda, improving farmer’s risk consciousness; establish risk dispersion and compensation mechanism.