Research On The Influence Of Inclusive Finance Business On The Profitability And Risk Of The Rural Commercial Banks In Zhejiang Province

Inclusive finance requires the provision of appropriate and effective financial services for all social strata with financial needs under the premise of equal opportunities and sustainable business.At the end of 2015,the State Council of China issued the "Promotion of Inclusive Finance Development Plan(2016-2020)".This plan points out the current key service groups of China’s inclusive finance business.It is necessary to improve the ability of rural commercial banks to serve small and micro enterprises,agriculture,rural areas and farmers.Based on China’s major national strategic deployments such as rural revitalization and common prosperity,The governments have regarded the development of inclusive finance as an important supervision and development assessment indicator for each rural commercial bank for a long time.However,there is a certain contradiction between the inherent social attributes of inclusive finance and the interests maximization of commercial banks as the main body of market-oriented operation.The traditional view is that the development of inclusive finance business by commercial banks will reduce their profitability and increase their operational risks.Based on the business and financial data of 79 rural commercial banks in Zhejiang Province from 2016 to 2020,this paper takes agriculture-related loan business and small and micro enterprise loan business as the representative indicators of the inclusive financial business of rural commercial banks,and establishes a panel data regression model to carry out this research.The research results show that agriculture-related loan business will help improve the profitability of rural commercial banks,while the increase in the proportion of loans to small and micro enterprises will significantly reduce their profitability.In terms of impact on risks,the study found that inclusive finance business does not significantly increase the risk of non-performing loans of rural commercial banks in Zhejiang Province,and the increase in the proportion of agriculture-related loans has a significant effect on reducing the non-performing loan ratio of rural commercial banks.This paper further analyzes and expounds the reasons for the above results from the perspectives of macro environment and micro business.This paper speculates that the resource investment in rural area by the government,the improvement of the rural credit system,and the supervision of small and micro enterprise loans are the main factors that affect the profitability of rural commercial banks.And the construction of risk control system based financial technology helps commercial banks to effectively control the risks brought by inclusive finance business.In view of the research conclusions,this paper puts forward some suggestions for the government’s inclusive financial policy and the sustainable development of the inclusive financial business of Zhejiang rural commercial banks.