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

Hao Luan (), Xiangping Jia () and Jikun Huang
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Hao Luan: Center for Chinese Agricultural Policy, Chinese Academy of Sciences, China
Xiangping Jia: Center for Chinese Agricultural Policy, Chinese Academy of Sciences, China

Review of Economics & Finance, 2014, vol. 4, 61-76

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.

Keywords: Wealth; Microfinance; Nongovernmental; Targeting; China (search for similar items in EconPapers)
JEL-codes: I39 O29 Q12 (search for similar items in EconPapers)
Date: 2014
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