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Optimal Loan Pricing for Agricultural Supply Chains from a Green Credit Perspective

Author

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  • Liurui Deng

    (Business School, Hunan Normal University, Changsha 410081, China)

  • Wentang Xu

    (Business School, Hunan Normal University, Changsha 410081, China)

  • Juan Luo

    (Business School, Hunan Normal University, Changsha 410081, China)

Abstract

In recent years, many countries have proposed various sustainable development strategies around environmental issues. The implementation of green supply chain management is an effective sustainable development approach that combines “environmental awareness” and “economic development.” Therefore, introducing the concept of “green” effectively is the main direction for the sustainable development of agriculture in the future. The impacts of green credit policies on agricultural supply chains have rarely been discussed before. Therefore, we focus on the incentive mechanism of green credit policies in the agricultural supply chain. We use the Stackelberg Leadership Model to construct a pricing model which adds the interest subsidy and required reserve ratio (RRR) cuts, and determines the pricing rules of bank loans and production decisions of the farmer in the agricultural supply chain under the incentive policy of green credit by quantifying the optimization problems of the bank and the farmer. The result shows that optimal decisions exist for both farmer and bank in the supply chain game framework. The implementation of the green credit policies contributes to both of their profits. Additionally, the green credit policies give the bank room to reduce interest rates so that the overall utility level of the supply chain could be improved.

Suggested Citation

  • Liurui Deng & Wentang Xu & Juan Luo, 2021. "Optimal Loan Pricing for Agricultural Supply Chains from a Green Credit Perspective," Sustainability, MDPI, vol. 13(22), pages 1-21, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:22:p:12365-:d:675588
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    References listed on IDEAS

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    Cited by:

    1. Muwen Wang & Kecheng Zhang, 2022. "Improving Agricultural Green Supply Chain Management by a Novel Integrated Fuzzy-Delphi and Grey-WINGS Model," Agriculture, MDPI, vol. 12(10), pages 1-19, September.
    2. Nan Li & Mingjiang Deng & Hanshu Mou & Deshan Tang & Zhou Fang & Qin Zhou & Changgao Cheng & Yingdi Wang, 2022. "Government Participation in Supply Chain Low-Carbon Technology R&D and Green Marketing Strategy Optimization," Sustainability, MDPI, vol. 14(14), pages 1-27, July.
    3. Yuehua Xia & Honggen Long & Zhi Li & Jiasen Wang, 2022. "Farmers’ Credit Risk Assessment Based on Sustainable Supply Chain Finance for Green Agriculture," Sustainability, MDPI, vol. 14(19), pages 1-20, October.
    4. Qizheng He & Yong Sun & Maoan Yi, 2023. "Evolutionary Game of Pesticide Reduction Management for Sustainable Agriculture: An Analysis Based on Local Governments, Farmers, and Consumers," Sustainability, MDPI, vol. 15(12), pages 1-19, June.

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