Analysis Of The Factors Influence Rural Households’ Informal Finance Borrowing Behavior

Thirty years has passed ever since Chinese reforming and opening up,rural finance of china has achieved a rapid development.But in the rural finance market,formal financial capital can not satisfy rural household’s demand, the informal financial sector has become the main channel to get loan.But for a long time, theorists rarely research of informal borrowing,even some people mistakenly linked to the illegal financing.Therefore,based on peasant’s behaviors theory, this paper attempt to analyze the characteristics of informal financial borrowing behavior,and identify the factors that influence the peasant’s behavior of informal financial borrowing, thereby provide some policy recommendations in line with China’s actual conditions of rural financial development.To obtained the data used in the study we will research two hundred households in five districts(counties) field surrounding in Chengdu,Sichuan province by means of former researches,investigation,empirical analysis,this study contains four sections:In the first section,this paper will review the former researches,and presents the purpose and frame structure.Firstly,sums up the theory of informal finance,peasant’s behavior of borrowing theory and the factors of informal financial borrowing behavior theory.Then analyses the factors that influence the peasant’s behavior of informal financial borrowing and put forward the theoretical foundation and hypothesis of this paper.In the second section, outlined the basic situation of the peasants in investigation area.Firstly,we introduce the general situation in Chengdu;secondly explain the situation of households,such as:age, education, health, family population,income,expenditure;finally investigate the situation of peasant’s borrowing,such as:the structure of borrowing,the cost of borrowing,the application of money,liabilities, the situation of repayment.Trying to find the possible factors that influence the peasant’s behavior of informal financial borrowing from the survey.The third section is the empirical research,through Factor Analysis Method, we find out the factors that influence the peasant’s behavior of informal financialborrowing can be divided into three categories:the first is personal factors;the second is borrowing capacity and condition; the third is family structure.After weight calculation we find among these factors,the greatest impact is personal factors.Through Multivariate Logistic Regression Analysis we find out the significant influence factors of informal finance borrowing behavior.The fourth section,the main conclusions and policy recommendations are as follows:the first,in the process of borrowing,most peasant choose the informal financial channel;the second,informal finance has great advantage;the third,borrowing condition,personal factors and family structure are the three factors of peasant’s behavior of informal financial borrowing surrounding in Chengdu,and the significant influence factors are are age, education, social relations and liabilities;the fourth,the informal financial borrowing has some defects that need to strengthen the supervision.At last,the paper puts forward some policy suggestions from government to establish and perfect the system and mechanism,the development of financial institutions themselves,the peasant household level.