The Prominent Problems Of China's Micro-credit Study

In the modern theory of poverty, concept of poverty, which was considered only in the field of economic, has been expanded to political and cultural fields. It becomes a complex system. With the introduction of the equality, the policy of helping the poverty-stricken people has changed from the traditional one which mainly aimed at the minimum living guarantee to the new strategy to improve the work abilities of poor population and give equal chance to them. As a financial method, micro-credit gives an impetus to economic growth and has an active effect on poverty alleviation. The function of the micro-credit is attracting more and more concerns of the developing countries.In China, the fund demand of poverty population is huge, but the regular financial institutions usually refuse to lend money to the poor population because of profit motives and policy restriction. The huge fund demand and little supply provide a good opportunity to the micro-credit and become inherent power of the development of micro-credit.At the macroeconomic level, China Banking Regulatory Commission published the notice named"Several opinions of adjustment of the banking institutions entry policy in rural area which can support building the new rural area of Society Community". In this notice, the Commission makes the banking institutions easy to enter rural market which can lead more funds to support the construction. It is obvious that the government totally support the micro-credit to achieve the goal of poverty reducing.However, there is a conflict between the reality of the micro-credit development and the hope of the government and poor population. The development of micro-credit meets a lot of problem which holding back the develop speed.To conquer the conflict between the huge demand and little supply, the major problem of the micro-credit is mainly focused in the essay. The essay is in four parts: Part One: briefly introduction of the background and main theories of the micro-credit. Part Two: introduction of the emergence, development and basic theories of micro-credit. Part Three: analysis the major problem of the micro-credit. Part Four: suggestions on the development of micro-credit. The government should deregulate the interest rate, enforce the infrastructure construction and supply the pubic commodity.The originality of the thesis mainly lies in the following aspects: first, adopt the theory of Morduch to analysis the problem in domestic market; Second, research the succeed solution worldwide. Then use the experience to settle the problem in China.