The Crux of Farmer's Loan Difficulty: A New Perspective

Farmer's loan difficulty has restricted rural economic development for a long time. What's the problem's crux and how to solve it? Based on the comments of relevant research documents,this article studies on the risk bearer and the way of risk aversion of different financing mode divided into three levels from the point of cost of credit investigation. Through the analysis,the article arrives at the general rule of risk aversion. Firstly,from the financing way,no matter what kind of financing,the risk is undertaken by the investor.Specifically,in direct finance the financing risk is taken by the shareholder or the creditor and the risk subject of indirect finance is the bank. Secondly,from the risk subject,normally the cost of credit investigation of direct finance is lower while the cost of credit investigation of indirect finance is higher. Lastly,from the cost of credit investigation,the investor can accept credit guaranty when the cost of credit investigation is low enough and the investor will demand property mortgage if the cost of credit investigation is high. Thus the general rule provides a new perspective for solving farmer's loan difficulty. Based on the theoretical interpretation,this article seeks out the concrete causes of farmer's loan difficulty combined with farmer's property status. Accordingly,the suggestion and feasibility analysis of countermeasures are presented.