Research On The Development Strategy Of Rural Banks

Community banks refers to those small rural financial institutions which established by government in recent years to standardize rural financial markets,promote capital flows to rural areas,and support the development of rural economies.The establishment of rural banks has a strong policy objective where government target at utilizing community banks to support the development of three rural issue while squeeze the market space for private lending to purify the rural financial market.Since the pilot project initiated in 2007,the overall development of rural banks has realized a speed and smoothly development meanwhile it has also shown the trend of polarization.Bank of China Fudeng Village Bank,Jianxin Village Bank,and Zhengyin Village Bank have all steadily expanded their scale and outlets to ensure its own profit which is conducive to the rural financial supply to a degree.However,some community banks have lost their strategic market positioning of supporting agriculture in their fierce competition with internet finance,microfinance companies and other financial institutions,resulting in frequent violations and penalties imposed by the banking regulatory authorities.Even some community banks suffered serious losses and acquired by other financial institutions.With the implementation of national financial constitutional reforms and the rejuvenation strategy for rural areas,community banks have been entrusted with great responsibilities by government.Thus how to make good use of their own operating advantages,embark on a path of sustainable development and spread great impetus for our country's rural economy has become a problem that needs to be solved urgently.In the process of analysis and research,this paper adopts case study method,field investigation method,questionnaire survey method and other analysis methods,and applies Porters theory of competition,inclusive finance theory,stakeholder theory and other relevant theories.In terms of research methods,this paper analyzes the external environment of village banks through PEST research method,analyzes the industrial environment of village banks through five forces model,and studies the internal development and risk environment of village banks through questionnaire survey and semi-structured interviews.Influenced by the shortage of personnel and the opacity of information,there are still some problems in the development of village banks,such as opaque corporate governance,prominent credit risk and lagging development of science and technology.Taking the village bank J in Tengzhou,Shandong Province as an example,this paper analyzes the current development situation,problems andcauses of the village bank,and then puts forward the development strategies and suggestions of the village bank: besides adhering to the market positioning of "supporting agriculture and supporting small ones",the village bank should also optimize in the aspects of corporate governance,risk prevention and control,product innovation and technological upgrading.This paper can provide reference for the future development strategy of village banks.