The Research On Sustainable Development Of Chinese Rural Microfinance

Rural financing is our social focal problem in the current process of industrialization and urbanization.Sustainable development of microfinance can resolve three rural issues smoothly.And it is directly related to social stability and the economic development. In an era of undeveloped financial intermediation as well as some countries of less-developed financial intermediation, development opportunities are often given some people who have a certain capital accumulation. While those who are lack of capital accumulation, were excluded from the economic growth trajectory,can't share with the benefits of economic growth. With the shortage of investment capital,farmers usually face the long-term poverty traps. As an available and suitable tool for financial innovation, microfinance can help those who have the desire and capacity get the opportunity of getting out of poverty.Sustainable development of microfinance is propitious not only to the survival and development of microfinance institutions, but also to perfecting the rural financial market, promoting the development of backward areas and helping paupers get rid of poverty. According to the overseas microfinance practices, welfare microfinance and systematical microfinance have all chosen sustainable development as their goal in recent years.Relevant policies are made and both launched with management innovation.The dissertation indicates that they all target on sustainable development. Sustainability is historical choice of microfinance, at the meantime,it is also the need of development of microfinance institutions.The development practice of Chinese rural microfinance has experienced three stages of introduction, experiment and promotion.And it grows rapidly, especially in 2005 and 2006, under the pushing of our government and Central Bank, the rural microfinance is fully under way, and the "credit-only" microfinance corporations have been established.The development of rural microfinance is not only facing new opportunities, but also facing challenges.On the one hand, the reform of our national market-oriented is accelerating, so the rural microfinance development is also facing the market pressure;On the other hand, the rural financial organizational reform has brought new opportunity to the sustainability of rural microfinance.But at present our rural microfinance development is at initial stage. facing the problems on how to realize sustainable development.Considering Chinese rural microfinance practice, taking measures of qualitative analysis and quantitative analysis, and analyzing sustainability of microfinance institutions of our country from the scopes of supply and demand, the study points that China's rural microfinance is at primary phase and most of the institutions have not achieved the goal of sustainable development.The study analyzes the obstructive reasons of sustainable development of microfinance from macroscopic and microscopic factors.This paper considers the background and practical needs of development of Chinese rural microfinance.Based on foreign countries'microfinance practices, under international financial crisis, the study puts forward how to find a new economic growth point that is transferred from the cities to rural areas, according to the agricultural development and loan capital theory of Marxist economics and the Generalized Financial System of Preference.On the basis of sustainability and constraint analysis of Chinese rural microfinance and on the basis of analyzing the advantages and disadvantages of all sorts of rural microfinance models, a "trinity and four"management system with Chinese characteristics is designed."Trinity" consists of the government, the formal financial institutions, commercial microfinancial institutions and the farmers'associations. The former three aspects, serving for the farmers' associations, co-operate each other and finish loans and recovery activities.The farmers' associations who are the demand centre of the rural microfinance,are responsible for the coordination of the project loan and the provision of supporting services."Four" refers to marketing interest rates, flexible loan amounts, variable loan usages and reasonable periods of loan. The "trinity and four"management system can meet the needs of farmers better and realize the financial and organizational sustainability of the rural microfinance.Finally,the article points out the countermeasures and proposals.They are mainly about optimizing the external environment of the development of rural microfinance and improving its internal mechanism.