The Impact of Development of Rural Finance in Jiangxi Province on the Agricultural Economy and Farmers' Income

Based on the rural economic data pertaining to the development of rural finance, the growth of agricultural economy and farmers' income in Jiangxi Province during the period 1990-2009, we conduct empirical research on the impact of development of rural finance on the growth of agricultural economy and farmers' income, using the ADF test method, the Granger causality test, and regression analysis. The results show that the development of rural finance in Jiangxi Province has a significant positive effect on the growth of rural economy and farmers' income. When the ending balance of agricultural loans increases by 1 unit, the agricultural added value will increase by 0.3671 units; when the ending balance of agricultural loans increases by 1 unit, farmers' income will increase by 0.597 5 units, indicating that the development of rural finance plays a significant role in promoting the per capita net income of farmers. Finally we propose to increase agricultural credit efforts in the financial institutions, establish and improve the agricultural credit management system.