Author(s)

Fei Zuo

Corresponding Author

Fei Zuo

Abstract

Under the theoretical framework of information asymmetry, this paper discovers that the existence of insurance can mitigate impact of asymmetric information and helps to improve the expected return and willingness to supply. Further through case study of an insurance-credit cooperation program in Shaanxi Province of China, this research suggest the inadequacy of insurance item and coverage level should be particularly addressed, as well as supportive measures from the public sector should be implemented before insurance can essentially be an alternative mean to support credit supply to rural household.

Keywords

Information Asymmetry, Credit Constraint, Risk Sharing, Information Structure