Research On The Financial Performance Evaluation And Influencing Factors Of Rural Credit Cooperatives

In recent years,the No.1 Document of the Party Central Committee focused on the “three rural issues”.Meanwhile,it emphasized for many times that we should deepen the reform of rural financial system,develop Inclusive Finance,increase the investment of agriculture funds,and innovate rural financial products and the way of services.Rural finance is an essential part of China's financial system,which is an important force to support and serve the "three rural" development.Through years of continuous efforts,our country basically formed the rural financial service system with the Rural Credit Cooperatives(RCCs)mainly,the new type and the micro-financial institutions coexisting,which is an extensive coverage,multilayered and moderately competitive rural financial service system.For a long time,the RCCs have served the "three rural issues" as their responsibilities,playing an important role in supporting the development of agriculture,farmers and rural economy,and making up for the gaps in township financial services.Financial performance can reflect the quality of the RCCs' management.It is of certain significance to study the level of the financial performance of the RCCs and the influencing factors,which can promote the sustained and healthy development of the RCCs and better play the role of supporting agriculture.This paper reviews the existing literatures on the performance evaluation and influencing factors of the RCCs in order to put forward the breakthrough point to carry out the research on financial performance of the RCCs.The related theory of financial performance evaluation is analyzed on the basis of its connotation.Then,by using panel data of the RCCs of the 13 counties(districts)in Luoyang city from 2012-2016,the entropy method and BP neural network are used to calculate the financial performance of the RCCs in Luoyang.At the same time,this is used as the dependent variable.Finally,make analysis of the influence degree and direction of the factors to the RCCs' financial performance by Tobit regression.The results of this study show that:(1)The financial performance of RCCs in Luoyang is integrally low and there are significant gaps among the counties and districts.The development is quite uneven.Among them,the financial performance of the Rural Commercial Banks is superior to the RCCs,but the financial performance level has a declining trend.(2)Inflation,government intervention,and asset size have a significant negative impact on financial performance.Their increase will bring down the financial performance of the RCCs.(3)The level of risk management and the efficiency of staff greatly promote the improvement of financial performance.(4)In addition,regional economic development level and innovation ability have no notable effect on performance.At last,some suggestions are proposed basing on the findings.