Mfis Sustainable Development Problems

Since the end of the 1970s,when China introduced the policy of reform and opening to the outside world, the Chinese government has implemented nationwide a large-scale program for development –oriented poverty relief in a planned and organized way with a view to solve the subsistence issue of the poor in rural areas as its target while devoting considerable effort to all-around economic and social development. After entering the new century, based on our country's fundamental situation, China government develops new poverty-relieving strategy, which emphasize that poverty-relieve should reach every village and household.Microfinance is one of important methods of poverty alleviation and its characteristics of broad outreach rate and high paying-off rate facilitates the effect of poor reduction. Now the microfinance industry has stepped into an expanding stage, including financial institutions and non-financial institutions. But could the microfinance be a necessary supplement to the regional poverty alleviation? The answer mainly depends on its sustainability. This is because it is a long process for the poverty to steadily increase their income and improve their comprehensive quality, which can not be reached by offering some microfinance and technical services. So the microfinance institution should survive and develop in the long period. Considering the current situation and reality of microfinance industy in China, studying the sustainable development will be of great significance.International academy usually focus on the financial sustainability to judge the microfinance institution's operational sustainability or financial sustainability through analyzing institution's situation. The thesis adopts this view that financial sustainability is the key part of microfinance institution's sustainability, and organizational and technical sustainability are influential factors. This thesisr mainly analyses the influential factors of financial sustainability then builds up a performance evaluation system of financial institutions and non-financial organnnization sustainability, eventually puts forward some suggestions on the sustainable development of microfinance institutions in China.There are five chapters:Chapter 1:Theoretical foundation and reality of microfinance institution sustainability. The financial sustainability is the key to microfinance institution's sustainability, which refers to the constant operation and revenue covering all the cost without any subsidy. We can use the "self-sufficiency" or "subsidy relying index" to measure sustainability. The standard of measure the sustainability contains the theoretical foundation of institution sustainability. The reality of our country's microfinance institutions fail to realize the self-sufficiency. So it is necessary to study it.Chapter 2:Analysis of policy factors to the sustainability. The policy factor affecting the microfinance financial institution is mainly the interest rate regulation. The interest rate regulation accelerates the imbalance of supply and demand of credit capital in the rural market. As for the non-financial institution , the influential factors concentrate on the entering permission and financing policy. The illegal situation prohibits the institution from absorbing deposit and the non-financial institution has to depend on the subsidy, which is contradictory to the sustainability.Chapter 3: Analysis of economic factors to the sustainability. The economic factors affect not only financial institution but also the non-financial institutions. At first, analyses institution's cost by using the functional cost analytical method. Secondly, the author discusses institution's scale using the scale-cost-revenue analytical model. Any institution exists minimum scale. Thirdly, the author thinks over the production design. High exit rate will lead to the nonperforming loan and the operational cost increase. And the reason for high exit rate lies in the unfit production design.. At last, Ithe author studies t...