Rural credit cooperatives are an important part of cooperative organizations. Since the establishment of the world's first cooperative organization, the Fair Pioneer Society, in 1844, cooperatives around the world have generally continued to grow. Although the principles, purposes, organizational systems, and management models of cooperatives have continued to change with the times. Despite the changes and constant revisions, cooperative organizations are still moving forward with difficulty, and have become an important organizational form for human and social progress. With the vertical deepening of market economy, my country's rural credit cooperatives are also facing difficulties and challenges.
The reform of rural credit cooperatives must resolve two major contradictions
As community-based local financial institutions that provide financial services to agriculture and farmers, rural credit cooperatives play an important role in supporting the development of agricultural economy. The role is irreplaceable. As of 2003, there were 34,900 rural credit cooperatives nationwide, with a deposit balance of 2.2 trillion yuan, accounting for 11.5% of the total deposits of financial institutions nationwide. Especially in recent years, credit cooperatives in various places have actively opened small credit loans for farmers and joint guarantee loans for farmers, which has effectively alleviated the problem of farmers' loan difficulties. Credit cooperatives have become the main force in rural finance and the financial link connecting farmers.
Since 1997, although the reform of credit cooperatives has achieved certain results, the current problems are still very prominent. The main manifestations are: first, the property rights of credit cooperatives are unclear and the corporate governance structure is imperfect. Property rights are unclear, leading to defects in the governance structure. The "three meetings" (members' congress, board of directors, and board of supervisors) system of rural credit cooperatives are in vain, and the internal control problem of "one person has the final say" is very serious; the phenomenon of administrative intervention is serious, and management The system is not smooth, and the operating mechanism and internal control system are not sound. Due to the fact that the owner is absent, there is a lack of property rights foundation for a sound and complete credit cooperative operating mechanism and internal control system, and it is difficult to implement management responsibilities; secondly, the management system is not smooth. While strengthening the financial supervision of credit unions, the People's Bank of China has temporarily assumed the industry management functions of credit unions during the transition period. This system is not conducive to regulatory agencies' legal supervision and true implementation of management responsibilities. As local financial institutions, local governments have unclear management powers and responsibilities for credit cooperatives. Third, they have heavy historical burdens and poor asset quality. Many credit cooperatives have operating difficulties and have high potential risks. In addition, credit cooperatives have great difficulties in terms of service methods and financing. Channels and service means have not yet met the needs of farmers and rural economic development, and the problem of farmers' difficulty in getting loans still exists to varying degrees in many areas.
The reform of rural credit cooperatives must resolve two major contradictions.
The first is the contradiction between the nature of cooperation and the nature of commercialization. Credit cooperatives are one of the earliest types of cooperatives to develop in European and American countries after the 19th century. The rural credit cooperatives that started in my country in the 1950s were originally capitalized from farmers' shareholdings and had the nature of cooperative finance. However, they later evolved into government-run rural financial organizations and lost the original intention of the cooperative system. In recent years, with the adjustment of rural industrial structure, the increasing number of farmers working and doing business, labor export, cross-regional employment, and agricultural entrepreneurship in most regions across the country, the demand for rural financial services has become increasingly strong. But in reality, we found that: (1) Credit unions are nominally owned by members, but because the number of members’ shares is small or even getting smaller, it accounts for a low proportion of total assets, making it difficult to reflect members’ ownership of the credit union. relationship, making the main body of ownership of rural credit cooperatives virtual or absent. (2) Farmers hold more deposits in credit cooperatives. Although the current implementation of microcredit in rural areas has achieved some good results, farmers generally have fewer opportunities to obtain loans. Because the movement of credit funds is a movement of monetary funds with financial institutions as the starting point and return point. For financial institutions, the first principle of issuing credit funds is repayment, that is, ensuring that the loaned funds can be returned in time. Repayment is The essential requirement for the existence and continuation of the credit capital movement. However, in the lending activities of financial institutions, due to the influence of various uncertain factors, borrowers default and fail to repay their debts, resulting in frequent losses of credit funds and interest income of financial institutions, that is, financial institutions are faced with the impact of credit risk. Moreover, for a long time, information asymmetry in the game between farmers applying for loans and financial institutions issuing loans has led to the problem of difficulties for farmers to obtain loans and for rural financial institutions to obtain loans.
It is difficult for farmers to borrow money from rural credit cooperatives, and it is also difficult for rural credit cooperatives to carry out loan business in rural areas. Most of the credit funds of rural credit cooperatives are transferred to urban and township enterprises, and some rural deposit liabilities are terminated in the form of handing over deposit reserves and depositing money with the central bank. mobility in rural areas. (3) There are a large number of cooperative economic organizations at the township (town) level established after 1998, but they integrate rural political, economic and social responsibilities into one, and it is also difficult to fulfill the requirements of serving the development of "agriculture, rural areas and farmers".
The operating conditions of rural credit cooperatives are also a very worrying practical problem. Most credit unions across the country have suffered a lot of historical losses. In serious operating difficulties, on the one hand, credit cooperatives believe that agricultural operations are risky and farmers' income levels are low, and they are unwilling to provide loans to farmer members. Instead, they try to provide financial services to customers other than farmers (including urban industrial and commercial enterprises, etc.) services to achieve the effect of resolving financial risks; on the other hand, rural cooperative members who took shares felt that the credit cooperative's "cooperation" was not worthy of the name, and instead built unstandardized rural cooperation foundations.
In order to get out of the predicament, rural credit cooperatives are also actively exploring business management models that focus on property rights system reform. There are currently three popular models: the two-level corporate management model of rural credit cooperatives, the one-level corporate management model of county (city) rural credit cooperatives, and the industry management model of rural credit cooperatives. We believe that no matter which reform model is adopted, the key lies in correctly handling the contradiction between the cooperative nature of credit unions and the commercial behavior of their operations.
The second is the contradiction between non-profit behavior and commercial behavior. At present, there is a contradiction between the commercial behavior tendency of international non-profit organizations and the non-profit dominant motivation of domestic cooperative organizations. Although cooperative organizations are not purely non-profit organizations, they can be considered to be at some point on the "social enterprise spectrum". Therefore, international theories and practices on the development of non-profit organizations are also worth learning from the cooperative system. Domestic cooperatives should get inspiration from the management practices of other non-profit organizations and move closer to the operation of a complex commercial enterprise. J. Gregory Dees made the following analysis of the reasons for this tendency: the mercantilist spirit of the times makes for-profit behavior easily acceptable in the non-profit world; many non-profit organizations and leaders are looking for new ways to Provide social products and services in a way that does not make beneficiaries dependent; leaders of non-profit organizations are looking for the key to solving the problem of financial sustainability; the sources of funds available to non-profit organizations are tilted towards more commercial channels; competition Adversaries are also prompting nonprofit managers to consider commercial financing as an alternative to traditional funding sources. In fact, we have reason to believe that cooperative organizations, as not-for-profit organizations in a complete sense, should know how to use commercial operations better than purely non-profit organizations to make cooperative organizations more competitive and thus able to Better serve members.
Rural credit cooperatives should enhance their service functions
The important thing in the reform of rural credit cooperatives is to solve two problems: first, clarify the property rights relationship and improve the corporate governance structure; second, rationalize the management system , enhance service functions.
my country's rural economic development is very unbalanced, and the operating conditions of rural credit cooperatives in various regions vary greatly. According to the reform plan, following the principles of diversification of equity structure and diversification of investment entities, pilots of joint-stock systems, joint-stock cooperative systems and improved cooperative systems will be carried out according to different regional conditions. Rural credit cooperatives will gradually be turned into community-based local financial institutions with farmers, rural industrial and commercial households and various economic organizations as shareholders to serve rural economic development. The organizational form of rural credit cooperatives should be determined according to local conditions. In areas with a relatively developed economy, a high degree of urban-rural integration, and credit cooperatives with large assets and commercial operations, joint-stock or joint-stock cooperative banking institutions can be established; in counties with relatively dense populations or grain and cotton commodity bases, banks can be established as At the county level, rural credit cooperatives and county federated cooperatives should be transformed into unified legal persons; other regions can continue to implement the system of township rural credit cooperatives and county federated cooperatives being legal persons on the basis of improving the cooperative system. It is necessary to increase the merger and reorganization of high-risk rural credit cooperatives, and consider canceling the few that have serious capital and debt problems.
The reform of rural credit cooperatives must adhere to the business direction of serving "agriculture, rural areas and farmers". Even institutions that have implemented joint-stock reform must determine a certain proportion of funds to support agriculture based on the local rural industrial structure. Most of its credit funds are used to support agriculture and farmers in the region.
What should local governments do
The state announced the "Pilot Plan for Deepening the Reform of Rural Credit Cooperatives" (Guofa [2003] No. 15), which clearly requires: "Provincial people's governments should adhere to The principle of separation of government and enterprises requires that credit cooperatives be managed in accordance with the law, without intervening in the specific business and operating activities of credit cooperatives, and not delegating the management power of credit cooperatives to prefecture (city) and county and township governments. "This is actually to local governments. A problem arises. Obviously, there are obvious differences between finance and general economic work. After local governments take charge of managing rural credit cooperatives, it is difficult to deal with contradictions in the work: first, how to adhere to the principle of separation of government and enterprises, especially how to "unify and organize relevant departments to prevent and Dispose of financial risks of credit unions within its jurisdiction." The second is how to properly handle the conflict between policy business (supporting agriculture) and commercial business (profit). The current policy requires rural credit cooperatives to mainly serve "agriculture, rural areas and farmers" and not to make profits. In fact, it is a rigid constraint on rural credit cooperatives. At the same time, it is tantamount to imposing social functions that should be performed by the government and policy financial institutions. Rural credit cooperatives, which have independent accounting and are responsible for their own profits and losses, artificially position rural credit cooperatives, which are independent corporate legal persons, at the level of quasi-policy financial institutions. The third is how to find the combination of supporting agriculture and profit, and achieving balanced development of policy business and commercial business. After all, rural credit cooperatives are enterprises, and their essential attribute of survival first can never be avoided. If we put aside efficiency and focus only on service and dedication, it will inevitably lead to operating losses of rural credit cooperatives, which will eventually endanger their own survival over time. How can we talk about better serving "agriculture, rural areas and farmers"?
Local governments can start from the following aspects.
First, local governments, especially provincial governments, should guide rural credit cooperatives to persist in serving "agriculture, rural areas and farmers". At the same time, efforts should be made to activate effective credit demand in rural areas and provide a stage for rural credit cooperatives to fulfill their responsibilities in supporting agriculture. In recent years, the problem of insufficient effective credit demand in rural areas has become more and more prominent. This is not only a product of the current cold rural economic performance, but also one of the causes of even colder rural economic performance. Therefore, governments at all levels should formulate and implement industrial structure adjustment plans that are in line with local realities, adapt to local conditions and be market-oriented, promote integrated urban and rural development, cultivate new economic growth points, and activate the effective demand for credit funds by "agriculture, rural areas and farmers".
Second, in accordance with the government functional reform requirements of "separating government from enterprises", local government's management of financial enterprises can only be indirect macro-management, and cannot directly intervene in the business operations of rural credit cooperatives. The provincial government is responsible for the management of rural credit cooperatives. The top priority is to urge the municipal (prefecture), county, and township governments to position themselves, change their functions, and effectively maintain normal social and economic order. At the macro level, we formulate and implement laws and regulations that are conducive to social stability and the development of the market economy, guide and encourage social investment, and use economic leverage and legal weapons to promote the timely strategic adjustment of the national economy; at the micro level, we play the role of "night watchman" and "waiter" and crack down on All "perpetrators" who violate laws and regulations and disrupt social and economic order, including debt evaders, uphold the "three public principles", encourage and protect fair competition, and give sufficient confidence to all participants in social and economic activities.
The third is to deepen the understanding of the integration of rural credit cooperatives and rural economy.
The fourth is to deepen the understanding that preventing and resolving operational risks of rural credit cooperatives is the internal affairs of the government.
The fifth is to deepen the understanding of the status of independent corporate legal persons of rural credit cooperatives, fully respect their operational autonomy, and not interfere with their specific operations of loan issuance.
Sixth, the leadership team of provincial management agencies and county-level cooperatives should be well equipped, especially the "top leaders" should be selected correctly. The pilot plan clearly stipulates that pilot areas can "establish provincial-level cooperatives or other forms of provincial-level management agencies, under the leadership of the provincial people's government, to specifically undertake the management, guidance, coordination and service functions of credit cooperatives within their jurisdiction." At the same time, the provincial management agencies are given independent management rights and supported in fully respecting public opinion and strictly following the above principles to carefully select the leadership team of the county-level association.
The seventh is to build new property rights relationships in accordance with the principles of diversified equity structures and diversified investment entities, and according to the requirements of the modern financial enterprise system, improve the corporate governance structure of rural credit cooperatives and establish decision-making, execution, and The operating mechanism of supervision, checks and balances, and incentives and constraints will truly turn rural credit cooperatives into market-leading corporate legal persons with a scientific and complete corporate governance structure and a high degree of independence, and enhance their ability to avoid unreasonable administrative intervention, so as to Fundamentally prevent governments below the provincial level from transferring financial risks to rural credit cooperatives.
The eighth is to increase law enforcement efforts, resolutely crack down on evasion of debts of financial institutions, and effectively solve the problem of difficult enforcement of successful cases. Local governments should focus on the overall situation and take creating an honest market environment as their own responsibility. They should not use the so-called "stability" of individual enterprises as an excuse to undermine the legally established rules of the game under market economy conditions.
Defects in the reform plan: model and supporting measures
Although the reform plan for rural credit cooperatives has been finalized and has been officially launched in some provinces and cities, the reform still has many flaws. . We believe that the main focus lies in the reform model and its supporting measures.
First of all, the reform model needs further discussion.
How to effectively deepen the reform of the rural credit cooperative system in my country is still a major issue faced in current theory and practice. Regarding the direction of the reform of rural credit cooperatives, there are three typical ideas in theory: first, adhere to the cooperative system; second, implement joint-stock system transformation; third, establish a joint-stock cooperative rural financial enterprise. In addition, the "renationalization theory" was once popular in theoretical circles, that is, the re-merger of rural credit cooperatives and the Agricultural Bank of China.
With the promotion of the People's Bank of China, three models have been piloted in the field of rural credit cooperatives: the reorganization model within the original rural credit cooperative framework, that is, the unified model on a county basis carried out from 2000 to 2001. The Jiangsu model is marked by the establishment of a legal person and a provincial cooperative; the joint-stock model is the rural commercial bank model in Changshu, Zhangjiagang and Jiangyin that was reorganized and established on the basis of credit cooperatives in 2001; the rural cooperative bank model is the rural cooperative bank model that was established in rural areas in April 2003 Zhejiang Yinzhou Rural Cooperative Bank pilot model restructured on the basis of a credit cooperative.
He Guangwen, from the Rural Finance and Investment Research Center of the School of Economics and Management of China Agricultural University, pointed out that each of the three existing pilot models still has different problems. After the implementation of the county-level legal person system, rural credit cooperatives still follow the original property rights structure of rural credit cooperatives. At the same time, rural credit cooperatives actually rely on the government's invisible guarantee to survive. The government's supervision through the central bank has actually evolved into a kind of administrative intervention, and rural credit cooperatives have basically transformed into quasi-state-owned banking institutions. In this case, the reorganization of rural credit cooperatives as “quasi-state-owned” organizations under the leadership of the central bank is actually only an internal reorganization of quasi-state-owned organizations. This kind of tinkering within the structure is not a reorganization process that is conducive to clear property rights, nor is it a process that further promotes the existing rural credit cooperatives into a standardized cooperative system. The realization of this process has not completed the change in the nature of rural credit cooperatives' quasi-state-owned financial institutions. Therefore, the transition to a county-level legal person can only be regarded as a second-best option.
The rural credit cooperatives in the three cities in southern Jiangsu were restructured into joint-stock rural commercial banks. Their institutional performance is obvious in terms of clarifying property rights, strengthening restraint mechanisms and improving performance, but they also have certain flaws. Because if rural credit cooperatives are jointly transformed into shareholding systems nationwide, rural financial suppression will inevitably occur in traditional agricultural areas and economically underdeveloped areas. Agriculture and rural small and medium-sized enterprises, which are weak industries, will face the efficiency selection mechanism of credit. , are bound to suffer discrimination and insufficient financial support. At the same time, this model does not solve the conflict of multiple objectives that exist in the operation process of rural credit cooperatives. The central government needs to support agriculture, local governments need to develop, regulatory authorities need to prevent risks, and rural credit cooperatives themselves need to survive. It is difficult to maintain consistency in the realization process of these goals. The lack of a single business goal has caused confusion in rural credit cooperatives' business thinking and opportunism among operators. In this conflict of multiple objectives, local governments often obtain local benefits through administrative intervention and at the same time transfer costs to rural credit cooperatives. Then the rural credit cooperatives aggregate the costs through problem exposure, forming non-performing assets and operating losses, and then transfer this risk The burden is transferred to the central government, and the central supervisory authority resolves the risks of rural credit cooperatives by performing the function of lender of last resort or providing some form of subsidies, thereby increasing the cost of restructuring.
Some scholars believe that although the joint-stock cooperative model of Yinzhou Rural Cooperative Bank in Ningbo City, Zhejiang Province can achieve both the pursuit of certain profits and service to members, it is a waste for most rural areas in China. Feasible financial system arrangements, but after the implementation of the joint-stock cooperative system, due to the large number of natural person shareholders and dispersed equity, it is difficult for them to reflect their ownership of rural credit cooperatives, which shows that the old problem of absentee owners of rural credit cooperatives cannot be effectively avoided.
Chu Baojin from the Institute of Finance and Economics of Nanjing Agricultural University pointed out that judging from the practice in Jiangsu Province, the problem of owner absence has not been substantively solved, which has produced some negative impacts. The related governance structure effective operation has been questioned. The current property rights arrangement cannot effectively solve the problem of owner absence and insider control. Therefore, the effective operation of the governance structure has been questioned. There is no guarantee that the "three meetings system" will not repeat the same mistakes. No matter how the credit union's operating conditions are, members have a "free-rider" mentality. , believing that it will not have a significant impact on its own interests. In addition, the arrangement of this property rights system can easily lead to insider control. There is no intrinsic motivation to serve members, and the regulatory cost of promoting the goal of supporting agriculture through external supervision may be high.
Secondly, a series of supporting measures need to be formulated.
The current reform of rural credit cooperatives launched by the state is only a pilot project with limited goals. First of all, from the perspective of the implementation process of the reform plan, it requires the cooperation of all parties. For example, the China Banking Regulatory Commission has higher capital and capital adequacy requirements for rural credit cooperatives to transform into joint-stock systems and joint-stock cooperative systems. In the past, many rural credit cooperatives had to bear excessive agricultural policy burdens. Without external support, they could hardly Transformation. At present, the central bank has stated that it will use methods such as the issuance of special re-loans or special central bank bills to help rural credit cooperatives in pilot areas resolve some of their historical burdens. At the same time, local finance should also formulate "payment methods" for the other 50% of existing non-performing assets as soon as possible; another example is that rural credit cooperatives are under the management of the provincial government. Without relevant financial supporting measures, it will be difficult to implement them. For example, without agricultural insurance and rural deposit insurance mechanisms, it would be difficult for local governments to assume rescue responsibilities once a large-scale systemic risk occurs. Secondly, even if the plan is implemented, there is still room for further improvement in order to achieve the ultimate desired goal.
For example, the plan focuses on solving the division of powers and responsibilities between the central government and provincial governments, but the essence of the problem is how to make the reformed rural credit cooperatives truly motivated to operate on commercial terms. To this end, it is necessary to Minimize the government's shareholding, actively introduce diversified and responsible shareholders, and return the basic decision-making power of rural credit cooperatives to the owners, the board of directors, and the management appointed by them. For another example, how to ensure that joint-stock cooperative banks use non-agricultural capital operations in order to make profits? In the future, will it be necessary to further lower the management level and establish agricultural cooperative banks managed at the prefectural and municipal levels to better meet the financial service needs of grassroots agriculture?
In addition, my country currently has no relevant laws targeting rural financial institutions. Instead, some regulations were established and implemented by the People's Bank of China, as well as articles of association formulated by credit cooperatives at all levels with reference to the model drawn up by the People's Bank of China. However, these regulations and articles of association have relatively low legal effect. According to the theoretical logic of legal economics, the basic function of law in economic operations is to provide mandatory behavioral norms for market transactions, so that various economic entities participating in transactions can form stable profit expectations, thereby reducing transaction costs and improving economic efficiency. Specific to rural credit cooperatives, if the legal mechanism is not perfect, it may lead to irregular transaction rules within the credit cooperative, the transaction rules between the credit cooperative, the People's Bank of China, and local governments, hindering the improvement of economic efficiency. Therefore, it is necessary to introduce relevant laws as soon as possible and provide necessary penalties for violations.