Ngo Microfinance Institutional Arrangements

Microfinance has already become worldwide and has been the most powerful anti-poverty tool. In the early 1990s, microfinance is introduced to China by NGOs. But after more than 10 years of development, microfinance supported by NGOs in China can attribute its problems to internal and external causes. The reason is the system of China's microfinance supported by NGOs is unreasonable. So researching the institution of China's microfinance supported by NGOs is necessary.According to Network Theory, on one hand, in microcosmic prospective, microfinance supported by NGOs is a network, the formation of internal governance can be attributed to the efforts of donors, users, beneficiaries and supervisor. On the other hand, at a macro level perspective, microfinance institutions by NGOs is an organization, and together with the microfinance by others organizations in rural area. Thus it is unavoidably to conduct a research on internal and external networks structure during the study of microfinance supported by NGOs.In consideration of the current theories, network governance theory can find the root causes of the institution defect of microfinance supported by NGOs in China. The short of internal structure leads to such problems as ambiguous ownership, lack legitimacy, organizational structure exists in name only and supervision is too strict, etc. And in external structure microfinance supported by NGOs can not make good cooperation with the microfinance by others organizations in rural area. The solutions to these problems depend on good recognition and enforcement of network governance and network mechanism.In this paper, I first begin with the overview of microfinance supported by NGOs in China; then proposed the basic concept of network and the institution of network and the basic mechanism of network governance; thirdly analysis the internal and external networks structure of microfinance supported by NGOs; then point out the defects of the internal networks structure by network governance theory, and made some proposals; then point out the defects of the external networks structure by network governance theory, and also made some proposals; at last is the conclusion of the study and the issue needs further study. Literature Study, Comparative Study and Case Study are the main research methods in this paper.