Research On The Business Modeand Performance Evaluation Of China's Microloan Companies

As the foundation of the national economy, the development of agriculture ensures the wealth of the farmers, the social security, and further the prosperity of a country. The found of the microloan companies, which are targeted at the service for agriculture, the countryside and farmers, as well as the development of small companies, marks a new start for microfinance operated in China's institutions, indicating the advent of the commercialization and diversity of microfinance institutions. However, China hasn't yet established a reasonable and effective performance evaluation system on measuring the performance of microloan companies, and most of the previous studies on the performance of microfinance take the qualitative approach.Based on the relevant literatures on the operating of microloan companies in 31 provinces, this paper firstly summarizes the similarities and disparities in the business mode of the microloan companies, and presents a detailed analysis on the current situation and the existing problems of the mode. Drawing on Joanna Ray Wood's index framework, and on account of the business mode of the microloan companies in China, the paper then accurately selected six indexes to comprehensively evaluate the microloan companies'performance: size, efficiency, asset quality, profitability, financial viability and social responsibility, grounded on which the performance evaluation system is built up, not only measuring the operational and managemental conditions of microloan companies from the conventional economic aspects, but also taking the non-economic aspect, namely, the companies'social responsibility into consideration. The evaluation system proposed in this paper would be supported by the empirical research on the financial figures and operations collected from 12 microloan companies in Hangzhou, Zhejiang Province.Finally, in view of microloan companies'current development, business mode and performance evaluation, this paper proposes suggestions on the future development of China's microloan companies from the perspective of policy-makers, in order to guide their sustainable development. The result of the research can not only enrich the rural financial theory, but also improve the economic benefits of microloan companies, guarantee their survival, boost their development, and provide better services for farmers, the countryside and agriculture.