The Development Of Non-formal Financial Institutions, Microfinance Study

More attention has been paid to microfinance as an effective instrument for poverty alleviation. Currently, the formal financial institutions are leading the microfinance in China, but confronted with plenty of challenges. Therefore, the complement of informal financial institutions has been increasingly important.This paper conducts a comprehensive analysis about three forms of informal microfinance institutions including their histories, operations, challenges and recommendations. As for the dilemma of profitability and public interests, we should position each institution according to its mission and target:Microcredit Company should emphasize more on the commercial sustainability, while the NGO should consider more of the interests of impoverished people. P2P microfinance online platform, as a creative form of microfinance, shows the great power of social capital.