China’s Micro-loan Companies Risk Analysis

Micro-credit is a kind of small scale financial services for the low income estate in the urban and rural. It has developed rapidly since seventies last century. In the eighties, micro-credit was introduced into China, and in June,2005, we started the new stage of "the commercial micro-credit". The micro-loan companies have mushroomed emerged across the country. The development of the micro-loan companies can promote the development of the "three rural" and SMEs, explore a effective way of the folk finance, promote the development of the economy of our country. But the micro-credit companies only has a history of less than seven years in China, still in the exploratory stage, there are many risk factors from outside and inside in the course of its development, they have adverse effects to the future development of the companies. Therefore, the analysis and research of the micro-loan companies can control and reduce risk, it has practical value on improving the profitability, it also has great significance for the development of the economy.This article take the India’s micro-credit crisis as the background, discusses the risks from outside and inside in the development processes. I focus on the impacts from inside structure and outside environment to these micro-loan companies. Firstly this article introduces the related theories、backgrounds、purposes and significances, explains the research ideas and methods, reviews the related theory research of the academic circles at home and aboard, finds out the shortcomings in the studies, then this article introduces the current development of the micro-loan companies in our country. As the city of Hefei for example, I analyze ten companies and find out the problems and risks of them.The micro-credit crisis in India has a great shock to the global micro-credit industry, also has sounded the alarm bell to the development of the micro-credit. The India’s commercial micro-credit and China’s micro-credit company have many similarities, so the micro-credit crisis has important enlightenment to our country. Although the possibility of the crisis in our country is unlikely at present, there are a lot of problems and potential risks in our micro-credit companies, we can’t ignore the prevention and control of the risks.At present, our micro-credit companies have many potential risk factors. This article focuses on the analysis of the outside and inside risks, and combines with the India’s micro-credit crisis, then gives measures and suggestions, provides the certain guidances and references to the development of the micro-credit companies.Finally, the paper make a prospect to the micro-loan companies. The author thinks the rural bank is not the best way of the micro-loan companies, from a realistic point of view, the micro-loan companies should be positioned on the" new non deposit-taking financial institutions", we must clear the micro-loan companies are financial institutions, at the same time, we cannot deviate the aim of establishing the micro-loan companies, the micro-loan companies must make a better service to the the "three rural" and SMEs, make an important role in the area, make the vulnerable groups equal access to the financial services, play an more important role to promote the development of the national economy.