The Research On The Relationship Between Informal Financial Development And Rural Economic Growth

Informal finance is not only prevalent in the developing countries and regions, but also exists in the developed countries. Since 1980 s, the industrial structure has undergone significant adjustment, the proportion of the second and the third industry has increased, the individual and private enterprise have developed rapidly. The amount of capital investment and technological content of the agriculture are also continued to increase and the scale, channels, and methods of the blend in funds also have higher demands.Undeniable, the double characteristics of our country economic led to the double characteristics of financial, especially down our present circumstance the financial system is insufficient, the financial markets is low level, the rural funds is shorted seriously, the formal finance also cannot satisfy the development of the rural economic and affected from some government repression policy, which are laid the foundation for the informal finance.Although, it is not exists inside the policy system of the financial system, the development of it has many disadvantages and even can affect the country’s macroeconomic regulation and policyfrequently,We cannot ignore the role of informal financial development on economic growth.Therefore the paper will first analyze the reason of informal financial on the basis of both financial development theory and the rural financial development theory.Then according to the economic growth theory it will analyze the mechanism of the informal financial on how to improve the economic growth,.At the same time by using the statistical software form Eviews to carry on an empirical analysis. The conclusion is about the informal finance improved in the economic development,however the economic development cannot effect the informal finance in a short time.Lastly it will put forward some policy suggestions of the informal financial development on the basis of its advantages and defectives,including providing informal financial legal system safeguard,strengthen the informal financial internal control and external supervision,perfecting the informal finance and formal financial supplement and absorbing the experience of the foreign informal financial, etc.