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Household Access to Nongovernmental Microfinance, Formal Credit and Informal Credit in Rural China

Author

Listed:
  • Hao Luan

    (Center for Chinese Agricultural Policy, Chinese Academy of Sciences, China)

  • Xiangping Jia

    (Center for Chinese Agricultural Policy, Chinese Academy of Sciences, China)

  • Jikun Huang

    (Center for Chinese Agricultural Policy, Chinese Academy of Sciences, China)

Abstract

There has been a rising concern that microfinance is abandoning its mission to serve the poor. Based on a longitudinal dataset, this paper examines rural households¡¯ credit access to all the sources in less developed areas in China, and analyzes its relationship with household wealth. It is found that nongovernmental microfinance has expanded rapidly by serving a mixture of poor and wealthy clients. Meanwhile, formal financial institutions have gradually reduced their loan services in poor areas and have targeted more on the wealthy. In the presence of a large unmet demand for credit in rural China, informal network became the primary source of credit to smallholders.

Suggested Citation

  • Hao Luan & Xiangping Jia & Jikun Huang, 2014. "Household Access to Nongovernmental Microfinance, Formal Credit and Informal Credit in Rural China," Review of Economics & Finance, Better Advances Press, Canada, vol. 4, pages 61-76, May.
    • Handle: RePEc:bap:journl:140205
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Wealth; Microfinance; Nongovernmental; Targeting; China;
    All these keywords.

    JEL classification:

    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other
    • O29 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Other
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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