At times, development economists have argued informal loans serve the same role as informal insurance. Empirical research shows that the motives for using informal loans are that rural households want to share risks when external shock occurs. Instead of looking at the village level, we construct a national-wide panel dataset based on the China Family Panel Study (CFPS) and the China National Bureau of Statistics to investigate Chinese farmers' motives for using informal loans and giving gifts among the social network of friends and relatives. To control for potential endogeneity between borrowing amounts, lending amounts, and the value of the gifts given, we develop a system of simultaneous equations and apply the Three-Stage Least Squares (3SLS). Our results support the hypothesis of reciprocity motives and emphasize the impact of the rural household head's personality on the financial behaviors, but we do not support the assumption of informal loans as insurance.