| Currently economic development in China does not achieve balance, and the gapbetween urban and rural areas is the major aspect. Rural finance supports the rural economicdevelopment, agricultural modernization and farmers’ living standards improvement. Ruralfinancial reform is the essential task at present and in the future in China, which has beenemphasized by many important documents and policies in the past10years. Reform willfocus on innovative financial products and services to meet the demand of diversified andmulti-level rural financial step by step. In spite of relevant fiscal policies having improvedfarmers’ income, the conflict between urban and rural dual economy structure has beenserious, and rural area backwardness has not been changed fundamentally. The paper putsforward the demand oriented to rural financial product innovation, which is the core offinance supporting agriculture, rural areas and farmers, and the actual requirement ofbalancing urban and rural development and raising the level of rural economy.Firstly, the paper elaborates the connotation and characteristics of rural financial productinnovation, and introduces relevant theories about financial innovation and financial productinnovation. On the reference of the benefit cost model built by Anderson&Harris (1986), thepaper analyzes the cost and benefit of rural financial product innovation from the perspectiveof demand and innovation motivation, which points out that larger market demand is the mainpower motivation to financial product innovation, and lays theoretical foundation for thefollowing research.The paper collects the research reports from each branch of Central Bank, China’s ruralfinancial statistics yearbook, China’s rural financial service report, the national bureau ofstatistics yearbook and some official data, as well as some survey data from author’s fieldresearch. Inductive and deductive methods are used to carry on research o rural financialdemand. The paper is divided into borrowing needs, investment needs, indemnificatory needsand convenience financial service. The characteristic of every demand is analyzed; thedemand weakness existing in the rural market is pointed out.Then, based on demand analysis, the demand oriented rural financial product innovationmethod is analyzed. The innovation of the credit product, investment product, andconvenience product is analyzed. The study focuses on the design of the product which isbased on the demand. So that customers will accept the innovation frit in a faster and betterway. In order to carry on further analysis, the study also combines some typical cases toaccomplishment.At last, the paper puts forward relevant strategies and advice to demand oriented rural financial product innovation from improving supporting policy, functioning agriculturalfinancial institutions innovation, and establishing well external environment. |
