County Banking Institutions Saturation

Economics, finance demand determines the supply of finance. In one region, if financial supply does not keep up with changes of financial demand, it will inhibit economic development. In recent years, the county finance has get great development, and gradually form a pattern of the county financial supply comprising commercial finance, policy finance, cooperative finance, private banking and Internet banking. Various financial institutions also have covered the vast network most of the county, township and rural areas. However, farmers and SME loans, difficult pledged problem have not been fundamentally resolved. The county financial institutions are lack of innovation, a high concentration of lending authority to the bank top, and uncoordinated development of the county economy, capital flight and other issues.On the basis of the existing literature, reference on the county in Henan Province by understanding the needs and financial supply from the "Institutional View" and "functional view" financial development start to the county bank lending, as well as the size of financial institutions and practitioners scale development of the main indicators of efficiency, analysis of county banks in Henan saturation problem. Taking Henan province 108 counties(cities) as a sample, in accordance with the level of economic development will be divided into developed, moderately developed and underdeveloped categories, collected from 2011 to 2014 data, by constructing panel data model to study the county comparative analysis of the relationship between the banking institutions and the development of county economy, and three different levels of economic development of the county to investigate the saturation of the county in Henan banking institutions. Draw the following conclusions:(a) County banking institutions of Henan Province in general, the number of bank outlets is already saturated. The balance of the loan county areas will decrease as the number of institutions to promote local economic growth.(b) For the different levels of economic development in the region, banking institutions saturation problems are differences. In the medium-developed counties, the relationship between the performance of the banking sector and economic growth are not significant. In developed counties and underdeveloped counties, the current number of banking institutions have already saturated, and employees have not yet reached saturation. The relationship shows significant unsaturated between bank loans and economic growth in the less developed counties.(c) The study also found that improving the efficiency of the county regional financial institutions had a significant role in promoting to the local economic development.There are two innovations of this paper:(a) research perspective. From the perspective of saturation, the paper uses normative and empirical research methods to study the development of county banking institutions in Henan Province.(b) innovation research content. This paper takes 108 County of Henan Province as a sample to research the differences in saturation and financial developments efficiency at different levels of economic development county in Henan Province and the whole province, including the number of financial institutions and employees, Lending and deposit balance of banking institutions and so on.