The Research On The Financing Mode Of Small Loan Companies In China

In order to solve the financing problems of farmers and SMES, in1993, GrameenBank model was introduced into China, and began to pilot commercial micro-creditinstitutions in2005. So far, five or six years passed, micro-loan companies has gotrapid development, but there has also been a series of problems. The shortage offunds, which directly hindered the sustainable management, is one of the mainproblems.In the first chapter, it introduced the small loan company’s background andsignificance. Also it introduced the present research situation in domestic and foreigncountries. The second chapter introduces the development course of Chinese smallloan company and its theoretical basis. The third chapter tells the financing channel ofChinese small loan company is not smooth. And these factors lead to Chinese smallloan companies’ financing difficulties. The following section mainly discusses thesmall loan company’s innovations to expand the financing channels. But thesefinancing channels also have limitation and cannot promote in large scale. The fourthchapter gives the policy recommendations for small loan companies to expandingtheir financing channels. And Policy Suggestions includes encouraging small loancompanies continuing to innovative financing channels, strengthening cooperationwith other agencies, reducing the resistance that small loan companies reorganize intorural banks, actively absorbing private capital to expanding financing channels andencourage small loan companies to list. In order to successfully expanding thefinancing channels, the government and small loan companies need joint effort. Onone hand, the government should enhance the effort for small loan companies. Theadministrator can broaden the funding ratio of small loan companies, and providemore incentive policies to make other institutions more willing to work with smallloan companies. Also, on the premise of risk control, the local government can timely launch of some innovative forms of financing according to its local condition. On theother hand, the small loan company should regulate its development and improve itsbusiness performance in order to attract more institutions to cooperate with small loancompanies.