The Impact of Financial Interlinkage on Credit Rationing in Developing Countries: An Investigation in Rural China
Abstract
Financial interlinkage has become an innovative way for rural households to get loan with connection of formal financial institutions and rural intermediaries. This paper is examining the rural households’ explicit and implicit demand for credit, and empirically investigates different types of credit rationing that occurred in China, and then use the Probit model to identify the impact of financial interlinkage on credit rationing. Quantity rationing, and transaction cost rationing turns out to be released by financial interlinkage significantly. The respondents join in the financial interlinkage appear to be effective to increase their wealth characteristics, especially agricultural income.
Keywords
Financial interlinkage, credit rationing, credit demand, rural households, Probit model
DOI
10.12783/dtssehs/adess2017/17769
10.12783/dtssehs/adess2017/17769