The Mode And Performance Of Local Commercial Banks' Microfinance

2005 was set by the United Nations as Year of Microfinance, and in 2006 Grameen Bank in Bangladesh and its founder received the Nobel Peace Prize.In recent years as microfinance projects around the world develop,the international community pay sustained and fervent concern to the mode and role of microfiance.Microfinance was first created in the 1970s in Bangladesh,initially it was considered to be a means of helping the poor.Microfinance provides microcredit with higher interest rates to poor people through a special system without collateral assets, which maintains relatively high repayment rate.Internationally,the development of microfinance initially relied mainly on donations, later it progressively reached the double standards :to maitain sustainable and to serve the targeted groups.Currently in many developing countries, microfinance has not simply focused on helping the poor,more attention is paid to providing services to low-income groups.The practice of formal financial institutions in the microfinance is of concern, which is an important trend of microfinance development.Based on the diffirent welfare and institutional concepts ,this paper analyzes the evolutionary process of microfinance mode,holding that the existing commercial and sustainable development of microfinance has gradually become the mainstream.The development of microfiance is not rigidly adhere to one single form,formal financial institutions should play an important: role in the development of it.This paper analyzes local commercial banks'microfinance mode from the perspective of social capital,and anlyzes the reason of "microcredit" and "the poor's bank" emerging in Taizhou combining theoretical analysis and empirical studies, from the local economic situation and micro-credit supply and demand situation of Taizhou.The article uses the field research of Taizhou case to study the mode and performance of local commercial banks' microfinance.In addition,this paper comparative analyzes the mode and performance of a variety of domestic and international microfinace.The main conclusions of this paper are as follows:Firstly, trust,network and norm used in microfince are helpful to overcome asymmetric information and moral hazard, and local commercial banks fully use the social capital in developing microfinance.Secondly,based on the field research,Taizhou mode is special both in loan efficiency and risk control.Thirdly, the empirical analysis of Taizhou case shows that Micro-enterprise, self employed people are major customers of the three Taizhou local commercial banks.Local commercial banks are sustainable both in institution concern and project concern.What's more,the depth of microfinance service of the three institutions are better than that of the pilot microfinance companies in China.