A Study on the Operational Mechanism and Practical Experience of Digital Agricultural Industrial Chain Finance: A Case Study of Leading Enterprise Dominant Model

Abstract

To alleviate the credit constraint problem of farmers, a financial model of the agricultural industry chain has emerged in China, and has undergone digital transformation with the development of digital technology. In order to explore the operation mechanism of the digital agricultural industry chain finance, this study, based on the review of its typical models, takes the leading enterprise dominant model as an example. Combining the case of chili agricultural industry chain finance in Xiangcheng County, Henan Province, this paper starts from the problems existing in the local traditional industry chain finance, and analyzes the specific process and operation mechanism of the leading enterprise dominant digital agricultural industry chain finance model. The study finds that the local digital agricultural industry chain finance has realized direct data transmission between farmers and financial institutions by building its own e-commerce platform within the leading enterprises. This helps to improve the efficiency of farmer loans, reduce the cost of risk identification for financial institutions, optimize the efficiency of capital turnover, and thus break through the drawbacks of traditional industry chain financing methods, easing the credit constraints faced by farmers. The possible contribution of this paper is that by analyzing the breakthroughs achieved in the digital transformation process of the chili industry chain finance in Xiangcheng County, it provides empirical references for the development of digital agricultural industry chain finance in China.