The Research Of New-Type Rural Finance Situations Development And Countermeasures In He Nan Province

Though the healthy development of rural economy cannot be achieved without a harmonious financial environment, a sound rural financial system is more indispensable for such development. In most rural areas of China, particularly impoverished rural areas, there are few financial institutes and the financial services are also out of date. Meanwhile, though new rural construction, the building of a moderately prosperous society and urbanization accelerate and the economic strength improves constantly, rural financial institutes still fail to catch up with the rapid economic growth. This has considerably stunted the rapid and healthy development of China’s rural economy. In the development process of traditional rural financial institutes, there are varieties of problems like outflow of rural funds, simple financial services, issuing difficulties of small loans, government’s excessive intervention in market, unsound legal environment, and deterioration of credit environment and financial environment. In consideration of this, the pilot new rural financial institutes represented by rural banks, rural fund cooperation societies, and small loan companies are advised to be built. This can not only improve the entire rural financial system and reduce internal systematic risks, but also address the urgent financial needs in rural areas to inject "fresh blood" for rural economic growth. However, the new rural financial institutes which just emerge haven’t developed their own operating characteristics yet. Besides, there also are various other problems like insufficient governmental support, few business branches, poor social recognition, and uncontrollable risks. Apart from these, new rural financial institutes are caught up in the market competition against traditional financial institutes, which is not only an opportunity but also a challenge for them.In Henan Province as a strategic hub which Central China develops, the development of its new rural financial institutes play a crucial role in facilitating the growth of Henan’s rural, agricultural and innovative industries. This paper analyzes the development situation of Henan’s new rural financial institutes, explores their operation problems, and puts forward strategies and suggestions for the optimization of Henan’s new rural financial institutes.This paper consists of five chapters. The first chapter is introduction, which describes research background(such as about how to address the issues of agriculture, farmer and rural area, the problems of rural construction and development and rural financial reform), research objectives and significance, literature review and conclusions at home and abroad, research contents and structure, and innovations and deficiencies of this paper. The second chapter takes Henan Province for example to elaborate on the development situation of new rural financial institutes. The outline of this chapter is to give an overview of new rural financial institutes and make a classification. Then, three new rural financial institutes including rural banks, rural fund cooperation societies and small loan companies are analyzed and discussed in details from various aspects, including their development situation, operating status, agricultural support and restricting factors. Afterwards, Henan’s new rural financial institutes are compared. Finally, current development characteristics of Henan’s new rural financial institutes are highlighted. According to the development situation and operation of new rural financial institutes, the third chapter points out the problems of institute operation, external disturbance and financial environment deterioration:Operation problems such as unreasonable distribution, few branches, capital shortage, deviation of operation policies, and lack of talents; External disturbance problems like poor regulation, high risk, lack of control, low recognition, and lack of internal cooperation; And financial environment deterioration problems such as weak economic foundation, low income, capital outflow, unsound legal system for credit, and outdated rural insurance. The fourth chapter brings forth strategies and suggestions for the problems described in the third chapter. As for the operation problems, for instance, the solutions are to correct operation errors, explore a suitable development mode, highlight talent cultivation, expand financial products and provide diversified services; in respect of external disturbance, the methods such as self-publicity, diversified financing, expansion of financing channels, and reform of financial property right system are proposed; as regards financial environment deterioration, the rural financial environment can be improved through a sound rural credit system and financial law system as well as the enhancement of policy support and internal control. The fifth chapter reaches a conclusion as well as speculates the future development trend of new rural financial institutes.