Research On The Legal Framework Of Microfinance Institutions Of China

"Three Agricultural Problems"is the most important problem in modern economic construction of China. Its development directly impacts on the progress of national economic construction. However, the dual structure of urban and rural finance is an aggravation issue which leads to the low coverage of financial institutions, shortage of financial supply, inadequacy of competitive forces, outflow of capital, and lots of other problems in rural areas. In order to alleviate the situation that poverty residents do not have access to financial services in rural financial system and farmers can hardly obtain credits, China Banking Regulatory Commission proposed to establish the microfinance institutions. Microfinance institutions concentrate on"agriculture, rural areas and farmers"which make them become the important component of rural financial system in China. Microfinance institutions have great significance to establish new-type rural financial institutions and to improve the rural financial system. In view of microfinance institutions are still in the pilot phase, it is inevitably that they have defects which need to be improved: ambiguity of legal status, confusion of legal framework, imperfection of regulatory system, and poor ability of risk control. The imperfection of legal framework of microfinance institutions leads to inadequate of function. Only eliminating these defects can protect the sound development of microfinance institutions.This paper is based on this background, abides by combination of theory and practice, guides by law orientation of microfinance institutions and propose further design scheme of legal framework of microfinance institutions. This paper begins by systematically introduce the basic contents of microfinance institution which include the universal concept, the background, the unique advantages and the types. Since the period of the development of microfinance institutions is relatively short, microfinance institutions can be more accurately understood through introduction of the basic contents. The second part of the paper introduces the contents of deciding the law orientation of microfinance institutions. Through the general introduction and related rules of microfinance institutions, the paper discusses the specific law orientation and defects of microfinance institutions. In the third part of the paper, it uses the development of microfinance institutions in Vietnam and Bolivia as examples to explore the law orientation and legislative model of foreign countries which can provide experience for domestic legislation of microfinance institutions. The forth part of the paper suggests a strategy for improving the legal framework of microfinance institution, and introduced in detail the legislative mode, law orientation, contents of microfinance institutions which can be used in domestic, looking forward to build a legal framework which is perfect for China in the future.