The Dual Threshold Limit of Financing and Formal Credit Availability with Chinese Rural Households: An Investigation Based on a Large Scale Survey

The literature on credit availability for rural households primarily focuses on the supply side, and largely ignores the demand side. This paper divided the credit process into three stages using large-scale household survey data. It also reviewed the credit process in other developing countries. A dual sample selection model was used to deal with the dual self-selection problem, which has been neglected in previous studies. This paper found that the main obstacle that farmers faced in obtaining financing was fear of applying for credit from formal financial institutions. In addition, there were significant differences in the determinants of different stages of the credit process of rural households