Steady progress in innovation in financial services for agriculture, rural areas and farmers

Along with the accelerating pace of agricultural marketization and modernization, the demand of “agriculture, rural areas and farmers” for financial services has become increasingly urgent. In recent years, the role of China's traditional rural financial service institutions has been somewhat strengthened, and new-type rural financial institutions such as village and township banks and microcredit companies have flourished, so that the financial service needs of “agriculture, rural areas and farmers” have been partially met. However, affected by a variety of factors, China's financial services for “agriculture, rural areas and farmers” are still quite inadequate at present, mainly shown in: the supply of financial services is relatively undiversified and cannot meet the diverse needs of “agriculture, rural areas and farmers”; funds for “agriculture, rural areas and farmers” drain away seriously, with large amounts of capital flowing to cities and non-agricultural industries; and because the credit risk of agriculture-related finance is relatively high, the asset quality of the relevant financial institutions is rather poor and they lack the capacity for sustainable operation. To solve the problems existing in financial services for “agriculture, rural areas and farmers”, it is necessary to actively promote innovation in the financial service model for “agriculture, rural areas and farmers”.

Innovate financial products and technologies. At present, financial services for “agriculture, rural areas and farmers” are still mainly loan services, but the sustained development of township and village enterprises and the rapid development of agricultural industrialization require financial institutions to develop more financial products for “agriculture, rural areas and farmers”, so as to satisfy not only the general financial needs of “agriculture, rural areas and farmers” entities, but also their needs for household protection financial products such as medical care, elderly care and children's education, as well as investment and wealth management products. At the same time, attention should be paid to strengthening technological innovation in financial services for “agriculture, rural areas and farmers”, because the research and development of financial products cannot be separated from the support of computer technology, communication technology and the like, and technological innovation is a powerful guarantee for financial product innovation.

Innovate the electronic financial service model. China's rural areas are vast, and farmers live in a relatively scattered manner. In recent years, China's rural informatization infrastructure has been greatly improved, providing conditions for innovation in the financial service model for “agriculture, rural areas and farmers”. Using ATMs, telephone banking, online banking, mobile banking and SMS banking as carriers and channels for innovating service mechanisms and means can partially solve the problem of missing financial services caused by insufficient physical outlets, and reduce the operating costs of agriculture-related financial institutions and improve service efficiency.

⟦NL> Establish a financing guarantee system. The lack of sufficient and effective loan collateral and the lagging construction of the rural credit guarantee system have seriously constrained “agriculture, rural areas and farmers” in obtaining loans. Financial institutions can join with the government and other relevant institutions to establish a credit guarantee system combining multiple models of credit guarantee, mutual guarantee and commercial guarantee, develop farmer joint guarantee, transform the individual credit of “agriculture, rural areas and farmers” into joint credit, raise the credit rating of credit guarantee in financial services for “agriculture, rural areas and farmers”, effectively alleviate the risks brought by information asymmetry in financial transactions involving “agriculture, rural areas and farmers”, improve the asset quality of agriculture-related financial institutions, and enhance the sustainability of their extension of agriculture-related credit.

Develop agricultural insurance. The proportion of agriculture affected by disasters in China is about 40% or more each year, 10%—20% higher than in developed countries. However, at present China's economic compensation mechanism for agricultural risk is still not sound, and agricultural insurance and rural finance have failed to form a community of risk and interest, thereby shrinking the supply of agricultural insurance, increasing the potential risks of rural financial institutions and affecting credit input for “agriculture, rural areas and farmers”. Research on financial and insurance services should be strengthened, an agricultural reinsurance system should be established and improved, a mechanism for transferring and sharing agricultural risks should be gradually formed, and the ability of “agriculture, rural areas and farmers” finance to resist risks should be enhanced. The government can take the lead and provide subsidies, joining with commercial insurance companies and leading agriculture-related enterprises to establish a policy-based agricultural insurance company, and fully consider the differentiated needs of different regions for agricultural insurance in terms of premium sharing and the setting of insurance types. Agricultural insurance companies should be encouraged to operate in a diversified manner and strive to expand commercial insurance business in rural areas so as to reduce the fiscal burden.

Improve the financial ecological environment for “agriculture, rural areas and farmers”. A sound financial ecological environment is an important prerequisite for the sustainable development of the financial market. The construction of the financial ecological environment for “agriculture, rural areas and farmers” should be strengthened in terms of the legal environment, the credit environment and the market environment. Farmers' credit files should be gradually established and improved, and the risk prevention and risk management capabilities of agriculture-related financial institutions should be enhanced. The construction of the rural credit reporting system should be accelerated, publicity and education should be strengthened, farmers' awareness of credit should be enhanced, and the sustainable development of agriculture-related finance should be achieved.