Abstract:In the 1990s, China introduced the group lending business. However, the actual development of the group lending business was not ideal. In order to carry out the group lending business effectively, it is necessary to understand the participating willingness in this business and the influencing factors of rural households’ decision. Based on a micro-survey data of 2 054 rural households in Yongshou, Shaanxi Province and applying the rational farmer theory, this study seeks to explore farmers’ participating willingness and the influencing factors by a binary Probit model. Results show that only 35 rural households in the past 5 years among the surveyed rural households who had experienced loan demand had actually participated in group lending. And the proportion of rural households’ willingness to participate in group lending was 14.75%. It revealed that their participating willingness in group lending needs improvement. There are two main financing channels, including financial institutions and private lending, for rural households. Rural households’ demand expectations, income expectations and risk expectations of group lending had significant positive impacts on their participating willingness. In addition, rural households’ personal characteristics, rural households’ economic characteristics and the group lending cognition also had some impacts on their participating willingness. Therefore, this study provides the following suggestions: increasing the demand expectations and income expectations, decreasing the risk expectations of rural households’ group lending, optimizing the mode or system design of the group lending, improving the quality of services, strengthening the guarantee capabilities of the group lending, and promoting the effective operation of the rural households’ co-guarantee mechanism.