Research On The Interaction Between Formal Finance And Informal Finance Poverty Reduction

Consumption poverty,improving people’s livelihood and achieving common prosperity are the essential requirements of socialism.As the core of rural resource allocation,rural finance has made great contributions to alleviating poverty.However,the current development of rural financial markets is not perfect,and financial resources are extremely scarce.Therefore,further improving the allocation efficiency of financial resources is an urgent problem to be solved in developing rural financial markets and improving poverty alleviation performance.Based on a systematic review of the relationship between formal finance and informal finance and the related effects of poverty reduction,this paper combines the relevant theories of financial development and poverty alleviation,and the path and interaction of formal finance and informal finance to reduce poverty.A detailed analysis was carried out.The results show that for the whole sample,in the dimension of consumption poverty,informal finance has a positive poverty alleviation effect,and the influence of formal finance and informal finance on poverty is a substitution effect;in the dimension of medical and education,formal finance The impact of informal finance on poverty is complementary.From the internal factors of poor households,only in areas with high social capital,formal finance and informal finance have significant complementary effects on the slowdown of consumption poverty.From the perspective of the poverty-stricken outdoor environment,the combination of formal finance and informal finance can significantly alleviate consumer poverty only in areas with good institutional environment.The innovation and contribution of this paper may be as follows:Firstly,the poverty reduction effects and interactions of formal finance and informal finance are different in different dimensions.Secondly,social capital and institutional environment are introduced as categorical variables to compare formal finance and non-conformity in different environments.The effect of formal finance on poverty reduction and its relationship.This paper provides theoretical and practical basis for regulating and guiding the allocation of rural financial resources,exploring the internal dynamic mechanism of rural financial poverty alleviation and forming a new rural financial poverty alleviation model in line with China’s national conditions,and providing theoretical guidance for China’s ongoing rural financial poverty alleviation.Policy reference to improve the scientific nature of relevant decisions.