Abstract
Climate change affects the stability of the rural financial system. This paper uses the multi-agent model to deduce the impact mechanism of climate change on the credit risk of rural financial institutions, and conducts a series of empirical tests. The results show that: (i) climate change has an adverse impact on the credit risk of rural financial institutions. (ii) agricultural insurance shows a threshold effect in the process of climate change affecting the credit risk of rural financial institutions. (iii) high-level agricultural insurance can mitigate the adverse impact of climate change on the credit risk of rural financial institutions. It reveals that the agricultural insurance is a crucial policy for taking precautions.
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