Impacts of formal credit on rural household income: Evidence from deprived areas in western China

Journal of Integrative Agriculture

卷:20

Feng-ying NIE¹  Xiao HAN²  Si CHEN³  Er-ga LUO⁴  Lita ALITA⁵ 

[1] Agricultural Information Institute, Chinese Academy of Agricultural Sciences, Beijing 100081, P.R. China;

[2] China Agricultural Science and Technology Press, Chinese Academy of Agricultural Sciences, Beijing 100081, P.R. China;

[3] College of Mathematics and Informatics, South China Agricultural University, Guangzhou 510642, P.R. China;

[4] Department of Agricultural Economics and Management, School of Public Affairs, China Academy for Rural Development (CARD), Zhejiang University, Hangzhou 310000, P.R. China;

[5] Environmental Policy Group, Wageningen University, Hollandseweg 16706, KN Wageningen;

关键词: formal credit;    rural household income;    rural finance;    poverty-stricken areas in western China;   

DOI  :  

来源: DOAJ

【 摘 要 】

Financial support is a crucial part of China’s poverty alleviation effort. Thus, it is vital to understand how formal credit impacts income growth in rural households. In 2012, 2015, and 2018, a survey was conducted to obtain a panel dataset of 592 rural households from 6 poverty-stricken counties in western China, including counties in Guizhou, Yunnan, and Shaanxi provinces. We use the data to examine the effect of formal credit on rural household income and the mechanism that underlies this effect. We find that formal credit can significantly increase rural households’ income in deprived areas in western China. Furthermore, formal credit promotes the reallocation of household labor from the agricultural sector to the non-agricultural sector and changes rural households’ decisions about investment-consumption behavior. These are the drivers of changes in the amount and structure of household income. Further analyses show that formal credit may widen income inequality among rural households in western China’s deprived areas. The individual characteristics of rural households, such as different levels of material capital, human capital, and social capital, bring about differences in the effects of formal credit on income growth. This study emphasizes that the implementation of formal credit is an essential strategy for poverty alleviation in underdeveloped areas, but policymakers should not excessively interfere with the financial market.

【 授权许可】

Unknown