In view of the farmers being restricted by the strong formal credit, this paper analyzes the financial literacy from the perspective of whether the financial literacy can effectively alleviate this constraint. Then, based on the sample data of China Household Financial Survey database (CHFS) in 2015, and on the basis of measuring farmers' financial literacy, the Probit model and Tobit model are used respectively. From the two angles of formal credit availability and loan amount unsatisfied, this paper verifies the existence of mitigation effect: financial literacy has a significant mitigation effect on farmers' formal credit constraints; The unmet amount of formal credit will decrease as the level of financial literacy increases. This paper attempts a new research breakthrough from the angle of financial literacy, which has certain theoretical and policy significance.

Zu Xiangfei, Xu Xuejun. Study on the Mitigating Effect of Financial Literacy on Formal Credit Constraints of Farmers. Academic Journal of Business & Management (2024) Vol. 6, Issue 11: 88-95. https://doi.org/10.25236/AJBM.2024.061113.

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