Author(s)

Ying Meng, Linda J. Cox and Jing Wang

Corresponding Author

Ying Meng

Abstract

Agricultural development and social welfare in rural areas is directly affected by the availability of credit. This paper is examines the rural households’ explicit and implicit demand for credit and empirically investigates the credit rationing that occurred in China. Five different types of credit rationing were investigated that affected 52.16 per cent of sampled households. Respondents’ wealth characteristics and risk reducing strategies including insurance and involvement in farm cooperatives appears to be effective in reducing their exposure to credit rationing.

Keywords

Rural finance, Credit demand, Credit rationing, Loans, Determinants