A Study On The Recognition And Motivation Of The Rural Mutual Fund Organizations' Mission Drift

Promoting the development of rural economic has been an important task for China's development and the core of rural economic is the rural finance.The backwardness of rural finance hinders the development of China's rural economy seriously.International experience and the reality of China's rural economy have shown that the key to solving financial problems in rural areas is cooperative finance.In order to better solve the financing problem of farmers in rural areas of China,the CBRC(China Banking Regulatory Commission)decided to carry out pilot work of rural mutual fund organizations in 2007.So far,as a new form of cooperative financial organizations,rural mutual fund organizations has developed rapidly.However,with the increasing number and the diversity of the development,the rural mutual fund organizations have appeared in a variety of problems.For example,some rural mutual fund organizations have appeared high interest phenomenon;the phenomenon that farmers withdraw their deposits in a short time in Guannan and Sheyang;more and more rural mutual fund organizations appeared loan deviation phenomenon,lending mostly to rich people and less "agriculture,rural areas and farmers" loans.These phenomena are all prove to us that the rural mutual fund organizations is evolving into "quasi-bank" institutions gradually,more and more rural mutual fund organizations occurred mission drift from time to time.Therefore,it's important to discuss the motivation of the rural mutual fund organizations' mission draft.The main research contents of this paper include two aspects:(1)Try to define and measure the mission draft of the rural mutual fund organizations,and to figure out whether the rural mutual fund organizations have mission draft problem through the research data.(2)Explore and empirical analyze the motivation of the rural mutual fund organizations'mission draft.The main logic of this article is "Theoretical analysis-Situation analysis-Empirical analysis".First of all,based on the summary of the existing literature of the rural mutual fund organizations and microfinance institutions' mission draft,this paper attempts to define the important concepts of mission draft of the rural mutual fund organizations and measure mission draft from the breadth and depth of financial services clearly.The average loan and loan interest rate of the rural mutual fund organizations was chosen as a measure of the depth of financial services and the mutual funds invested in rural areas accounted for a measure of the breadth of services.Secondly,the article analyzed the motivation of the rural mutual fund organizations' mission draft.According to Principal agency theory and insider control theory and the motivation of mission draft,the article discussed the motivation of the rural mutual fund organizations' mission draft from the perspective of insider control innovatively and constructed the analysis framework of the impact of insider control to mission draft of the rural mutual fund organizations.Then this article proposed the research hypotheses from insider control,internal inspection and external inspection.Combining the variables involved in the hypotheses,this paper constructed the corresponding indicators and made descriptive analysis by using the sample data obtained through the six counties of Jiangsu province in 2015.Thirdly,based on the descriptive analysis of the variables,this paper constructed the multiple linear regression model to analysis the impact of insider control on the mission draft of organizations and explore mainly influence factors of the mission draft of organizations.Finally,this article summarized the role of insider control played on the mission draft of these organizations,then proposed recommendations to control the mission draft of the rural mutual fund organizations.Through the analysis of mission draft,this paper draws the following conclusions:(1)The rural mutual fund organizations have already drifted their mission.According to the descriptive analysis of the variables,we can see that the current average loan has been a high amount compared with the income of local farmers,and with the passage of time,the average loan showed a rising trend.Loan interest rate was generally high and the rural mutual fund organizations cannot display its advantages.Meanwhile,the proportion of mutual funds invested in rural areas was small and much money was invested in non-agricultural fields(2)The degree of control of the insiders over the rural mutual fund organizations will affect the mission draft of the organizations.The greater the control power of insiders in the Council,the greater the average loan size is,the higher loan interest rates are and the smaller the proportion of mutual funds invested in rural areas is.That means the greater the control power of insider control,the greater degree of the mission draft of rural mutual fund organizations is;internal inspection and external inspection external inspection cannot play a significant inhibitory effect on mission draft.Combining these findings,we propose the following policy recommendations:(1)Regulate the internal operation of rural mutual fund organizations to prevent mission draft.(2)Establish the sponsor system of the organizations.(3)Improve the financial regulatory policies to promote the legalization process.(4)Establish the self-regulatory organization of the industry.