Since 2007，the three new rural financial institutions—village banks，lending companies and rural financial cooperative have been established gradually in each province and village banks have been developing rapidly.Village banks provided “three rural” with financial services and they have played a positive role in improving the rural financial market system and rural financial environment.Western region is the main pilot area of village banks，however，there are many problems which restrict the development of village banks，such as regional distribution，product innovation and sources of funding.Therefore，in order to solve the problems，this paper aim to put forward some proposals which based on the economic situation and geographical distribution in the western region.