An Empirical Study On Chinese Microfinance Sustainability

Micro finance Sustainability is propitious not only to the survival and development of micro finance institutions, but also to perfecting the rural financial market, promoting the economic development of depressed area, and helping paupers get rid of poverty. According to the results of analyzing the overseas Microfinance practices, we find that overseas microfinance all target the sustainable development.Microfinance has been introduced to China for the same reason for poverty alleviation. Although many achievements have been gotten, there is a big challenge for microfinance further development. How to keep microfinance institutions survived? Considering China's microfinance practice, taking measures of qualitative analysis and quantitative analysis, and analyzing the sustainability of institutions that develop microfinance in our country from the scope of microfinance supply, the study points that China's microfinance is developed at primary phase and all the institutions have not achieved the goal of sustainable development. Also the paper states that the following factors influence microfinance sustainable development such as (1) people's understanding in relationship between microfinance development and poverty alleviation; (2) government's macroeconomic policies; (3) managerial ability of microfinance institutions; (4) the extent of area development and commercialization; (5) social credit circumstance.In order to perfecting the rural financial market, based on the experience of foreign countries' microfinance practice, the paper points out that sustainability is the necessity for microfinance development. The following questions should be given priority to considering in policy-making: (1) put microfinance in the content of rural financial system; (2) change the role of government in microfinance development; (3) enact more agility rate of rural finance; (4) strengthen the supervision of microfinance to avoid the risks of development. In addition to those, institution capability must be considered in promoting microfinance sustainability.