The Multi-dimensional Poverty Reduction Effect Of China’s Rural Financial Development

Rural poverty has been widespread concern around the world, and it also been the key issues that international community committed to addressing. After the reform and opening up China’s economy has achieved rapid development, the pace of development is at leading position in developing countries, people’s living standard has been greatly improved, but the problem of poverty has not been fundamentally resolved, anti-poverty rate has slowed. With the improvement of the standard of poverty, there are still a large number of poor people in our country, anti-poverty work should remain to be done.Based on existing literature, this paper were first from the theoretical level to analyze the role of financial development for poverty reduction, rural development, then to quantify the financial indicators and indicators of poverty, and establish the panel threshold regression model to analysis of different stages of the development of rural financial development on poverty mitigation different roles in empirical. In order to reflect the multi-dimensional nature of poverty, this paper has selected income poverty, poor education, poor healthcare to characterize them in three dimensions, while selecting the scale of rural finance, efficiency of rural finance as two indicators to measure the level of rural financial development and use rural financial scale as the threshold variable, put degree of government intervention, rural fixed asset investment levels and GDP per capita as a control variable, to analysis non-linear relationship between poverty alleviation and rural finance development.With the relevant data of 30 provinces in China from 1999 to 2012,The paper testing the Nonlinear impacts of rural Financial on medical poverty,income poverty and education poverty are significant, and showing a distinct threshold characteristic.Before and after the threshold level,the effect on medical poverty is promotion and the promotion effect is gradually increased with the development of the rural finance; the effect on income poverty is inhibition,however,the inhibitory effect is to be shown only after crossing the threshold; the effect on education poverty changes to inhibition by promotion but only the inhibitory effect is significant.The Multidimensional relief Effects of financial development not only shows regional imbalances,but also presents the polarization trend. The result of empirical test has positive significance for the government poverty reduction policy, the government should give full play of the rural financial development’s inhibition effect on income poverty and education poverty in the low stage, and improve the situation of financial layout, regional imbalance between urban and rural areas, then find out the deep reasons of the financial development promotes the medical poverty, finally control the medical poverty by other means.There are two innovations in this paper: the first is the empirical method used in this paper, we use the panel threshold regression to test the effect of rural financial development on poverty reducing, this method can show the different effect of rural financial development on poverty reducing in different stage; the second is we use income poverty, education poverty and medcine poverty to describe poverty, to formulate poverty reduction to the government policy to provide positive Suggestions.