Abstract: This paper focuses on the shortage of farmers＇ funds in rural Inner Mongolia.According to the survey of the farmer household samples,there were more than 75% of the farmers who obtained loans either from formal financial including commercial banks and credit unions or from informal finance such as friends and relatives.The farmers selected the financing channels between formal and informal financial by the usage of the funds.The funds obtained from formal finance were spent on agricultural production,and the funds obtained from informal financial were used in life,education,health care and other expenditures.Moreover,low-income and small-scale farmers were more difficult to obtain loans from the formal financial.