The Study On The Agriculture Supporting System Of Village Bank In China

Village Bank is the innovation of rural financial reform in China, it is important for breaking the financial monopoly in rural areas. Its appearance can inject new blood to the rural financial market; it can also improve the network's coverage of rural financial institutions, and increase the financial supply in rural areas, the formation of new financial competition in rural areas. Then form a new financial competition in rural areas.The CBRC requires the village bank to provide financial services mainly to local farmers, agriculture and rural economic development; so village bank took the policy responsibility to support rural economic development at the beginning. The CBRC has developed a series of institutional measures to protect the object and purpose of setting up village banks. Although village banks meet the policy requirements to support rural economic development to some extent, however, it can be found some problems in the agriculture supporting system of village bank at this present situation. The first problem is the village banks are more inclined to choose the more economically developed regions, it leads the village banks are not "village". Second, its registered capital is high, so it can avoid the "micro" loans principle. Third, the profit-driven of capital and the commercial values of village bank make it deviate from the original intention of agriculture and to pursuit of high profits. It is mainly because of that, the effectiveness of the legislative level about the requirements of agriculture support is not high, and mostly are advocate norms which is lack of practical operability. There are some other reasons such as the design of the agriculture supporting system of village bank is imperfect and lack of supporting systems, the inherent defects of the rural financial markets affecting the effectively play of the agriculture supporting system. Therefore, village banks are difficult to effectively play the role of agriculture supporting system in the existing imperfections institutional framework.Therefore, it is important to build a complete agriculture supporting system of village bank. U.S. and Bangladeshi rural financial system is a successful example of financial support for agriculture; we can learn the successful experience from the two countries. We should have great importance of government support and the guiding role of financial institutions and have a clear market positioning. At the same time, we should protect the profitability and meet the needs of rural capital.Finally, in the construction of agriculture supporting system of village bank, we should adhere to the principle of the balance of commercial and agriculture and the principle of differential treatment. The built of a complete agriculture supporting system of village bank should from the establishment, operation and supervision of all aspects. Furthermore, in terms of the path of achieving, we should improve the legislative level and the relevant legislation to have a truly legal basis, we should play the role of government and improve the relevant institutional measures of finance, taxation, etc. and improve the environment of rural financial.