Abstract
Lending behavior among rural households is an important part of the rural financial market, not only promoting households’ income levels but also eliminating rural poverty and narrowing income disparity. In the rural areas, due to serious information asymmetry in the lending market, the informal financial market is an effective complement to the formal financial market. In 2013, 40 % of rural households participate in private lending; this proportion is far higher than the overall level. Private lending funds are mainly used for housing and production and operation, however, the funds mainly come from siblings and other relatives and friends. Only a small proportion of households obtain loans from informal financial organizations.
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