The Impact of Rural Credit Cooperatives Loans to Farmers Based on Vector Autoregressive Model

Chinese Rural Credit Cooperatives are committed to the development of rural areas and farmers service of formal financial institutions. Their loans are mainly for farmers or agricultural production enterprises. In this paper, we use annual data of Chinese Rural Credit Cooperatives loan size, per capita income in rural areas and rural Engel's coefficient, by using an Auto vector autoregressive model (VAR) to analyze the rural financial scale impact on farmer households' income and standard of living. From the research results of the study, the growth of rural credit Cooperatives loan size has not significantly impact on the household income growth, but the size of the increase for rural credit Cooperatives loan size has significantly influence the reducing on farmer households' rural Engel's coefficient which On behalf of the improvement of their living standards.