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

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.

Automated summary

The implementation of green supply chain management, which combines environmental awareness and economic development, is an effective sustainable development approach. Introducing the concept of green effectively is the main direction for the sustainable development of agriculture in the future. Research shows that green credit policies have positive incentive mechanisms in agricultural supply chains, benefiting both farmers and banks, while also improving the overall utility level of the supply chain.