Farmers’ Choice and Informal Credit Markets in China

Yan Yuan, Youxin Hu and Ping Gao

No 103887, 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania from Agricultural and Applied Economics Association

Abstract: Informal credit markets are very active in many developing countries including China. Informal financial associations have become a major channel of borrowing. Using data from the 2006 Rural Household Survey, this paper investigates farmers’ borrowings from both formal and informal sources with higher/lower interest, by looking into both demand and supply of loan. Consistent with the theory and previous studies, age follows an inverted U-shaped pattern in its relationship with the probability of borrowing from informal loan with higher interest. Our study shows that the impact of age disappears for the formal loan participation. In addition, high income and saving imply lower credit constraints. Moreover, household and county characteristics and financial conditions have a large and varying influence on farmers’ borrowing behavior.

Keywords: Agricultural Finance; Community/Rural/Urban Development; International Development (search for similar items in EconPapers)
Pages: 15
Date: 2011
New Economics Papers: this item is included in nep-mfd and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/103887/files/Yuan%20Hu%20and%20Gao.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea11:103887

DOI: 10.22004/ag.econ.103887

Access Statistics for this paper

More papers in 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().