Influential Factors On MFI Loan Officers’ Performance In China

In the new era, how to further improve the performance of microfinance institutions to better serve China’s rural financial market is a prominent problem. Different from the previous studies, this paper focuses on China’s microfinance institutions of all categories from the perspective of loan officers’ performance.The purpose of this paper is to analysis the influential factors of the loan officer’s performance based on the classification of the MFIs in China. The research firstly classified the MFIs into non-profit, traditional commercial and new commercial MFIs and then fugured out the mechanism of how these factors work. The research sees the problem from the perspective of both individual characteristic variables and institutional factors and uses different methods according to different kind of MFIs with different features. The research uses economrtrics for the analysis of the non-profit MFIs, uses descriptive methord for the analysis of the traditional commercial MFIs and uses algebraic model for the analysis of the new commercial MFIs.The main conclusion of the paper are as follows:In the aspect of individual characteristic variable, with regard to non-profit MFIs, the loan officers who used to be a farmer or worked in government, male, with a higher have higher chance to achieve better social performance; loan officers who have longer work experience in MFI, female, with a younger age have higher chance to achieve better financial performance. With regard to traditional commercial MFIs, loan officers with younger age, higher educational level, not being a farmer before have higher chance to achieve better finnacial performance but lower chance to achieve better social performance. With regard to new commercial MFIs, the loan officers don’t have real power in deciding the loan release. In the aspect of institutional factors, with regard to non-profit MFIs, it is important to clarify the non-profit mission, adopt special MFI financial instruments, value the training, keep the owner of the instituion be non-profit driven, carry out non-profit theme activities to strengthen the loan officers’social performance. It is important to formalize the institution, make the loan releasing work professional, adopt chain-store business mode, value cooperation with other entities, strengthen the informationalized level and improve the personnel pay and subsidy system to strengthen the loan officers’ financial performance. With regard to traditional commercial MFIs, the research focused on the incentive system by weight, fairness, award intensity and punishment intensity and give out an explanation of the problems of the incentive system. With regard to new commercial MFIs, the research find out that the only concern of the loan officers is financial performance. The reason for this phenomenon for one hand is there is a contradiction between servicing the poor and making profit for the for-profit owners. On the other hand, it is the lacking of financial innovation and system design that causes the loan officers have no ability to make as much profit as serving rich customers by serving the poor. The research bring out some suggustions by a lgebraic model from the perspective of Theory of incentive compatibility. On the whole, the main contribution of this research are:First, a clear division of the main types of MFIs. systematicly studied their business objectives and mode of operation, summerised the loan officer performance management generally. Second, the research mainly focused on the the main influencing factors of loan officer performance management on non-profit, traditional commercial and new commercial MFIs. and put forward some suggestions to solve the existing problems.