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The purpose of this study is to examine the demand for credit and credit rationing conducted by formal, informal and emerging microfinance lenders in the four poor counties of China.

This paper extends the existing studies on credit rationing in rural China by comparing the determinants of credit rationing by three different lenders, the formal lenders rural credit cooperatives (RCCs), the informal lenders and the new microfinance institutions (MFIs).

MFIs are capable of reaching out to the even poorer households if they develop the loan products based on the income and expenditure flows of these households.

The determinants of credit rationing by three types of institutions are estimated separately.

RCCs in China shall change their policy of discrimination against female-headed households. RCCs shall also simplify the loan application procedures and assess the clients based on their repayment capacities rather than the age or assets alone. RCCs could learn from MFIs to use incomes from migrant workers as a criterion to assess the loan applicants.

gender equity for loan access.

This paper extends the existing studies on credit rationing in rural China by comparing the determinants of credit rationing by three different lenders, the formal lenders (RCCs), the informal lenders and the new MFIs.

The purpose of this paper is to synthesize lessons from the agricultural value chain models and their associated financing mechanisms in China and India as to provide policy recommendations on how best to facilitate development of efficient and inclusive value chains.

The paper builds on a review of the existing literature on agricultural value chains and their financing mechanisms, and draws lessons from it for strengthening interface between product and financial markets in order to enable smallholders capture benefits of the value addition.

From the comparative review of value chain financing mechanisms and current policy contexts the authors find dominance of internal financing of value chains (in terms of provision of inputs, technology and services) in both the countries. Value chain finance from commercial banks and other financial institutions is limited and mainly through tripartite agreements among the financing institutions, lead firms and farmers.

The lessons drawn from various value chain models and their financing mechanisms provide feedback to financial institutions and policymakers to take measures to strengthen value chain finance in smallholder agriculture.

The paper undertakes a rigorous review of the existing value chain models and their financing mechanisms in light of the most recent research on emerging innovations and development strategies, in order to glean key lessons for policy recommendations on strengthening linkages between financial and product markets.