Management Review

›› 2018, Vol. 30 ›› Issue (11): 26-34.

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Performance of Rural Commercial Banks in China and Its External Factors

Jia Ruirui1,2, Liu Haiyan3, Guo Kun1,4   

  1. 1. School of Economics and Management, University of Chinese Academy of Sciences, Beijing 100190;
    2. Shixin Holdings Co., Ltd., Beijing 100101;
    3. Academy of Mathematics and Systems Science of the Chinese Academy of Sciences, Beijing 100190;
    4. Research Center on Fictitious Economy & Data Science, Chinese Academy of Sciences, Beijing 100190
  • Received:2017-11-10 Online:2018-11-28 Published:2018-11-22

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Abstract:

As an important part of rural financial system, rural commercial banks should undertake the important mission of supporting the development of agriculture, rural areas and farmers in China. However, rural financial market is short of available collaterals and agricultural production is risky by its nature, so the performance of rural commercial banks faces larger challenges than ordinary commercial banks. This paper evaluates the performance of rural commercial banks based on SBM method and finds that the performance has declined as a whole in recent years but with significant regional differences. Then the external factors that affect the performance in different regions are analyzed and the results show that the higher level the rural economic affluence and residents' living standard are at, the better performance rural commercial banks will have, while the more risky the rural production is, the worse performance rural commercial banks will have. In order to ensure the sustainable development of rural financial market, a perfect credit evaluation system must be established, the availability of collaterals must be enhanced, and the agricultural insurance must be vigorously promoted as a powerful supplement of the rural financial market.

Key words: rural commercial bank, business performance, SBM, external factors