By Gao Wei, Zhang Qiang　

Date: 2004/12/08　　

Abstract:

The main problems in the development of China's rural credit cooperatives are: the cooperatives only exist in name, deviating from the financial nature; the legal owner is absent resulting in internal control; redundant staff with low professional quality. The suggestions for solution are: foster community finance arrangements to fit in the blanks of true cooperative financial institutions in the countryside; rebuild real cooperatives in the credit sector to meet the demand of farmers in small amount loans and frequent services; direct a transition in advanced regions from credit cooperatives to rural commercial banks through a promotion of corporate governance structure; cut down redundant staff to raise overall competitiveness.