Inspiration from the Theory of Financial Development on Rural Financial Reform

Western theory of financial development is an excellent theoretical result which discusses the relationship between financial development and economic growth.By analyzing the history of China's rural financial reform,we can find that China's current rural finance has the feature of financial repression,including that the function of traditional rural financial institutions is not clear,there is lack of supports for new rural financial institutions,and lack of financial innovation in rural areas.We should use the theory of financial constraint to promote the development of rural financial by improving the system of rural financial institutions,innovation system and supervision system.