The Underlying Logic, Practical Challenges and Optimal Pathways for Urban Commercial Banks to Expand into and Empower the New Rural Collective Economy

Abstract

Can urban commercial banks effectively empower the development of the new rural collective economy by expanding into rural markets? This paper constructs a three-dimensional theoretical analytical framework of “cost–risk–efficiency”. Drawing on the typical case of Guilin Bank’s four-tier service network (city–county–township–village), and employing literature review and case study methods, it systematically analyses the micro-level mechanisms and practical challenges involved in urban commercial banks’ efforts to empower the rural collective economy. The research finds that, through mechanism innovations such as a four-tier service network, governance by rural elites, and industrial chain finance, Guilin Bank has demonstrated the theoretical feasibility of such empowerment; however, in practice, constraints such as the insufficient capacity of village collectives, high banking service costs, and an imperfect external institutional environment have hindered the full realisation of the empowerment effects. The marginal contribution of this paper lies in: adopting a problem-oriented perspective to reveal the practical dilemma that urban commercial banks face in empowering the rural collective economy—namely, that while theoretically feasible, implementation is hindered—and in providing targeted policy recommendations to promote the optimised development of this model.