Competition and corporation between formal and informal rural finance

The rural finance can separate into formal and informal finance departments with differences operation systems. The informal finance institutions have advantages in information collection and can supply credit to difference farmers with difference interest rate, so, it can improve the efficiency in rural finance market by join in. The formal finance institution can supply funds with lower cost with higher integrity, but it can´t distinguish the bad lender from the borrower. It can supply more funds to the informal finance by loan. The rural finance markets expressed fail, mole, competition and corporation by the difference performance of the two kinds of institution in the market.