chapter  5
22 Pages

Households’ indebtedness and borrowing behaviour in the natural village of Wulitang

Characterized first by a consistent lack of agricultural development and second by an outflow of manual migrant labourers to the eastern and southern regions, the natural village of Wulitang is a typical community in the process of agrarian transformation in rural China. Following the same structure of empirical analysis as the natural village of Yao in Chapter 4, this chapter examines the types of credit requested by households in Wulitang and the sources of finance in both the formal and informal markets. However, as a large number of villagers in Wulitang were migrant workers who had little need for credit to invest in businesses, households’ indebtedness in this village were usually loans for personal use, which were normally taken out in the informal credit market. Therefore, more emphasis in this chapter is placed on the informal credit market.