Microfinance Legal Research

As a special financial tool to serve for low income population and tinyenterprise,microcredit is mainly managed by commercial banks, policybanks and a lot of non-governmental organizations(NGOs). Sincemicrocredit has important effect in finance innovation and foundingharmonious society, Chinese government begins to develop microcreditenergetically. Because there is not relevance law, there has been a lot ofproblem that proprietary right is unclear, management system is notsuitable , right and responsibility is unclear.Financial organs didnotcorrectly treat microcredit with little sense of responsibility so as to leadlow efficiency, bad loan quality and high creditrisk. Investors alwaysentrust domestic NGOs to manage microcredit to help the poors.Butthere has occurred distorted relations between trustees and deputies.Sinceits fund is not enough much, There is a lot of difficulties in its sustainabledevelopment because of its fund limitation.According to the existing banklaws, a lot of microcredit organizations can not achieve the qualifications.According to our country's policy, NGO microcredit organizations isforbidden to absorb the deposit publicly and its capital source has beenlimited very seriously. The loan management and risk control also can notget full legal safeguarding. Most microcredit supervising and managing isout of legal supervising and managing system. Therefore,we mustformulate special Microcredit Law according to our country's characteristic to cultivate multiple microcredit organizations, establishefull competiting market and construct a consummative supervising andmanaging legal system.