Abstract
The paper utilizes random survey data of rural households to analyze the determinants of credit access in China and to measure impact of borrowing behavior on households’ welfare. The results show that households characteristic, property level, social relation, trading cost and financial information affect both probability and amount of credit access. Income, occupation, less distance to market centers, popularized level of financial knowledge and degree of understanding credit polices of finance institutions are found to affect credit access positively. And age of head of household is found to have an inverse U-shape effect on credit access. Moreover, amount of credit access is found to have a significantly positively related to rural households’ welfare, when using “consumption expenditures of households in recent three years” and “whether credit can improve households economy situation or not” as the proxy variable of rural households welfare. However, the regional effect of this impact is not obvious. The other factors of educational level, occupation, less distance to market and financial information are positively related to welfare.
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