Abstract：It is innovation of rural financial system model to allow private capital to enter the field of financial services in rural areas, and it also opens the road to attract private capital in national financial market. Institutional change achieves incremental reforms and the breakthrough in the reform of "path dependence", while the practice of the reform indicates that the new rural financial system reform has not been able to get rid of "North Paradox "and the new rural financial institutions are rooted in the weakening of the rural property, lack of competitiveness, large-scale preferences. To this end, we should make further liberalization of access to private capital and attract capital flows to rural areas by means of interest rate liberalization, agricultural modernization and new-type urbanization. The government should also conduct deposit insurance system and a comprehensive monitoring mechanism to protect the competitiveness of small rural financial organizations.
Keywords: Rural Finance,Private Capital,Market Access,Institutional Arrangements
source:Finance & Trade Economics ,No.3,2013