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With the effect of urbanization, the economic pattern of agriculture is replaced by the industry and commerce services gradually. Due to the significant changes of scorching competition of international and domestic finance and the establishment of agriculture bank, the credit department of Farmers’ Association shall think how to face such new operation environment and further make an operation strategy.
This research takes 251 credit departments of Farmers’ Associations from 2006 to 2013 as the researching samples. The return on assets, return on equity, non-performing loans ratio and asset turnover are the variables of operation efficiency. The univariate test and multiple regression analysis are applied to investigate the effect on the operation efficiency of the credit department of Farmers’ Association against the variables of operation characteristics, such as the level of urbanization, finance of member, background of executive secretary and the effect resulted from agriculture bank. Finally, to submit the recommendation to the authority as the reference upon making the policy, amending the law and establishing the operation strategy with the manager of Farmers’ Association.
The empirical result shows: First, when the level of urbanization, return on assets and asset turnover are higher and the non-performing loans ratio is lower, it shows that the credit department of Farmers’ Association located at a area with higher level of urbanization, not only its own net value and scale are larger, but also the operation efficiency of the credit department of Farmers’ Association is better due to the active economic market. Second, when the deposit loan ratio, non-performing loans ratio and asset turnover are lower and the return on assets is higher for member, and the deposit loan ratio and return on assets are higher and the non-performing loans ratio is lower for sponsor member and non-member, it shows the business ratio of sponsor member and non-member of the credit department of Farmers’ Association is increased, which is beneficial for the operation efficiency. Third, when the executive secretary is female, the return on assets is higher; when the executive secretary is older, female or higher education, the non-performing loans ratio is lower and when the executive secretary is younger, male or lower education, the asset turnover is higher. All above shows the operation of the credit department of Farmers’ Association is indeed affected by the background of executive secretary. Therefore, the selection and employment of executive secretary shall be executed carefully. Fourth, the higher the syndicated loan ratio or the higher the total deposit ratio of being carried forward to the agriculture bank is, the lower the non-performing loans ratio and the lower the asset turnover would be. In such case, the credit department of Farmers’ Association shall promote various businesses and enhance the professionalism by cooperating with the agriculture bank positively instead of earning the difference of interest rate of transfer deposit negatively. At last, under the reciprocal effect of level of urbanization and each operation variable, for the area with the higher level of urbanization, the assets quality could be increased based on the execution of deposit business of sponsor member. In addition, due to the scorching competition of market, the asset turnover is difficult to be increased against each financial business of member. The influence of operation efficiency resulted from the executive secretary is even reduced. With regard to the influence of operation efficiency resulted from the agriculture bank, the higher level of urbanization is smaller than the lower level of urbanization.
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