Rong Kong
College of Economics and Management, Northwest A&F University

Guarantee group is organized for the purpose to reducing financial risk. Based on a survey of 897 farm households in Shaanxi and Gansu provinces this paper builds framework to explain how farmers make decisions on joining guarantee group，and analyzes influence factors on their decisions using binary logistic regression model. The results show that farmers mostly approve of guarantee group system, and guarantee group loans have become an important formal financing channel for agricultural big families. Four variables such as farm land size, household total income, household credit situation, and farmer’s willingness to guarantee loans for others have significantly positive influence on making decisions for farmers to join guarantee group, while variables like farmers’ age has negative influence on the decisions.