Financial Support To Vulnerable Groups, Social Benefits And Policy Options

The financial instruments are playing the positive role in the alleviation impoverishment. Helping the poor with credit is an important component part in the counter-impoverished theory. Microfinace system with its own unique design become outstanding in the field of poverty alleviation, and receives more and more attention from the developing country.The targeting customers of microfinance are the vulnerable groups who are marginalized in the financial market. As to the little amount, the large risks, no guarantee, the high management and transaction costs, the regular financial institutions reject to loan to the minority groups. Because they are profit seekers or are limited in some policy. The systematic Micro-credit on the market rules, stressed the importance of maintain financial sustainability as well as achieving to support vulnerable groups. At the same time, the microfinance projects, which are small amount, short-term, poor self-organization, guarantee mutually, exclude the non-poor automatically and ensure that the loan repaying rate. As China is now in a period of economic transformation, economic restructuring, reforms of state-owned enterprises and other changes in the economic system, there have been some new vulnerable groups.Based on the analysis in society benefits and economic costs about finance support the vulnerable groups, this paper takes microfinance funds' supporting vulnerable groups as the breakthrough point, demonstrate the role of the financial support to the vulnerable groups. After analyzing the functions and the current problems of the Rural credit cooperative and microfinance institution in the operation process of supporting vulnerable groups, the author probes into the feasibility of financial supporting vulnerable groups. Finally, the article try to explore the roads of financial supportting to vulnerable groups developping continuable from the point of the responsibility of governments, external environment, internal mechanism and the coordinated public finance policy.