The Research Of Rural Households’ Credit Behaviors Under The Background Of Inclusive Finance

Recently, rural finance and financial inclusion has been hot issues and gotten a lot of attention at national level. However, Anhui province doesn’t possess a high degree of financial market development and possesses a high level financial exclusion in rural areas. The impact of banks’ credit fund on economic growth in north Anhui is relatively low, outflow of capital exists in a certain extent. Residents’business operation, investment and living standards are closely associated with their borrowing and lending behaviors, which indirectly injects impacts on rural economic development and rural financial system. Therefore, the analysis of rural households’ credit behaviors has both great theoretical and practical significance.This paper uses questionnaire survey equipped with descriptive statistical analysis and empirical tests to study the characteristics on farmers’borrowing and lending behaviors, and then summarizes the potential problems and reasons behind the imbalance of loan demand and supply. Finally, some feasible suggestions are contributed.This paper is focused on the investigation of credit behaviors concerning on borrowing and lending activities of 49 rural residents in Fuyang Anhui Province. Through the questionnaires collected from farmers located in three rural villages, including Huji village, Zhangxu administrative village and Yueliu village, statistical analysis is given. We could find that credit activities are common. Considering of the frequencies of informal loans and formal loans, farmers borrow more informal loans. Loans from regular borrowing are mainly invested in doing businesses or capital turnover, rarely for the usage of agricultural production, while the usage of farmers’ non-formal borrowing is usually directed to living loans such as house-building, marriage and education. No exact payment deadline, no warrant and mortgage, shorter borrowing period, small amount is the main characteristics of farmers’ non-formal loans. No explicit measure to ensure repayment is adopted by most informal loans. Borrowing and lending activities and strong demand for loans is common among farmers, however farmers cannot reach the mortgage and warrant requirements regulated by banks and lack the knowledge of loans policy and relevant economic measures. Zero-interest rate, small amount and frequent informal loans among farmers are beneficial complements for credit rationing of formal financial institutions, however the development of informal loans is also constrained by farmers’ own conditions and interpersonal trust degree. Theoretically, farmers’ human capital characteristics like educational attainments, age, gender, social capital characteristics and household incomes are all supposed to have influence on farmers’ accessibility of formal and informal borrowings. Through the empirical Probit modeling estimation of the observable influence factors of farmer’ credit behaviors, we could find that age is related to the informal source of borrowing, resulting in a nonlinear relation. Land area and social capital characteristics owned by rural household are positively correlated with informal borrowing. While higher percentage of labor force in a household is negatively correlated with informal borrowing. Only social capital is observed with a significant positive coefficient for formal borrowing. Other supposed influence factors are tested as insignificant.Based on the borrowing and lending current situations in surveyed villages, this paper illustrated feasible and comprehensive countermeasures. From the macro perspective, our government should alleviate urban bias policies, accelerate the liberalization of interest rate and ease rural financial market access conditions to provide a good external environment for rural financial institutions, promoting diversified and competitive rural finance market. From the micro-perspective, rural financial institutions should innovate credit products, improving the composition of loan’s interest rate, period, varieties, mortgage and warrant requirements. In the end of the paper, there is a summary of the sustainable well-running financial organizations in other countries, for example, Grameen Bank, French bank Credit Agricole and Bank Rakyat Indonesia. Domestic financial institutions could learn from them and implement credit operations properly in accordance with national and rural local conditions to promote rural economy development.