Research on Optimizing the Risk Compensation Mechanism for Agriculture-Related Loans in Yunnan Province under Inclusive Finance
Abstract
China is currently at a critical stage of comprehensive rural revitalization, where financial investment in rural areas is closely tied to economic development. Rural regions in Yunnan Province simultaneously exhibit challenges of financial institutions’ reluctance to extend credit and farmers’ difficulty in accessing financing. This situation stems from high credit risks among farmers, the complexity of risk assessment, and low willingness among financial institutions to provide loans. This study examines the current state of Yunnan’s agricultural loan risk compensation system. Findings reveal that the system primarily relies on government guarantees, lacks market-based risk compensation funds, suffers from insufficient capital replenishment, and features inadequate risk early warning mechanisms and rural credit system development, which are factors that constrain financial and economic growth in rural areas. Based on these findings, this paper proposes corresponding recommendations for optimizing the agricultural loan risk compensation mechanism.
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