On The Role Of Government And The Role Of Microfinance

Since the outbreak of the financial crisis in 2008, its negative impact on both domestic and foreign economic climates is looming large. It is therefore imminent and highly relevant to mitigate the financing difficulties of small and medium-sized enterprises. An effective solution of this problem will provide the small and medium-sized enterprises with diversified ways and methods to realize sustainable and sound development, and let them play an even greater role in supporting the overall economic development and social progress.Microcredit is a good cure in this regard. It is of vital importance that the government plays its due part to facilitate the development of microfinance.This thesis first introduced the definition of microcredit and the its development in China and other countries, followed by an analysis of the evolution of domestic and international microcredit institutions which would provide experiences and lessons for the emerging microfinance sector of China to draw on.The thesis chose two basic models of microcredit in Shanghai Baoshan district——microcredit companies and financing guarantee companies, and analyzed their respective operational and management mechanism, as well as the role played by Baoshan District Government in their operations. The focus was on the government's role as a supervisor, service provider and participant in the microfinance operation.Through comparing the two models of microcredit in Baoshan district with the microcredit in Japan, the author attempted to find out the problems concerning the role played by governments in China's microcredit development and their roots, and made suggestions as to the future role the government should play in China's microcredit development.The final chapter was a summary of the insufficient involvement of the government in Baoshan microcredit model, and suggestions were duly made. Meanwhile, a new microcredit model--chamber of commerce financing platform with government participation--was established, where banks and chambers of commerce were brought in. This new model was set up on the basis of the situation of Baoshan district, with considerations of the characteristics of the abovementioned Baoshan models and Japanese model.The body of this thesis consisted of five chapters, including Introduction, Brief Introduction of Microcredit Pattern, Analysis of Baoshan Microcredit Model, Analysis and Comparison of Baoshan Microcredit and Japanese Microcredit, and Problems and Suggestions of Government's Role in Baoshan Microcredit Development.