Financial Crisis, The Development Of Microfinance In China

Since the 1990s, the micro-credit has been introduced in China for more than ten years. In the beginning, it was known as small loans from banks. Until this century, the micro-credit has been emphasized. Particularly, when the sub-prime mortgage crisis became to a financial crisis, micro-credit as an effective means to ease the financial crisis has become more widespread attention. By analyzing the development of micro-credit in China under the financial crisis, this paper concluded the current need for the development of micro-credit in China, and pointed out the existing problems and solutions. Full-text was divided into four chapters.Chapter one was about the general theory of micro-credit, including its background, core concept, principle and classification, and then analyzed the foreign mode and the reference to China.Chapter two was a detailed analysis of Chinese micro-credit current development under the financial crisis. First, it was an overview of the development of Chinese micro-credit. It was divided into four stages, the initial pilot, the project expanded, full involvement of the financial institutions in rural areas and the implementation of commercial micro-credit. Then it was a detailed analysis of the development status of Chinese micro-credit, including structural analysis and quantitative analyses. After the summary and comparison of Chinese current development of micro-credit model, it pointed out the alternative development model.Chapter three illustrated the need for the development of Chinese micro-credit in the global financial crisis. On one hand, Chinese micro-credit can effectively alleviate the financial crisis, specifically including that the micro-credit can reduce the employment pressure, and guide the changes in consumption patterns. On the other hand, the micro-credit in China had a significant meaning to poor farmers and urban micro-enterprises. It solved the issues concerning agriculture, countryside and farmers, and provided strong protection to the micro-enterprise. In the countryside, micro-credit can feed and clothe poor farmers, promote the construction to the new rural economics and spiritual civilization, and enhance the status of rural women. In cities and towns, it can also provide necessary funding for industrial micro-enterprises, business micro-enterprises arid high-tech micro-enterprises.Chapter four pointed out the specific problem in Chinese micro-credit. From the macro level, it included the understanding of positioning and operational issues, policy environmental constraints issues, regulatory issues and commercialization of sustainable development. From the micro level, it included the problems of bureaucratic capital, interest rates, inadequate funding and carrier, and risk compensation. And then, it put forward countermeasures and suggestions to solve the above problems. From the macro level, we should re-position the development of the micro-credit; strengthen the micro-credit environment, and conduct appropriate oversight. From the micro level, we must establish a mechanism to attract capital investment diversification, develop the micro-credit insurance, and complete market-oriented reform of the interest rate and so on.