Research On Development Of Micro-credit In Western Areas

Microfinance originated in the1970s is regards as a financial products, which mainly severs to low-income people in the rural excluded from traditional finance.Benefited by the finance innovation, poor people gain the opportunity to get rid of poverty by means of external finance support. Many state represent great enthusiasm to study and research the microfinance.and several developping countries and region had energeticly carried out it even got astonishing performance. This international success offers our nation new vision and method in order to deepen the rural financial system, change the status quo of the lack of rural financial credit, to solve the problem of urban-rural gap in China is gradually expanding and resolve the "three rural" issue. Since the early1990s China began to introduce and promote pro-poor form of rural microfinance. After20years of development, microfinance has undergone several stages:by the NGO to formal financial institutions and social organizations to imitate, rural credit cooperatives to the national policy to promote encourage and guide the personal capital into the rural financial market, the pilot microcredit company, rural banks and other stage. Micro-credit in rural areas has been made to alleviate the contradiction between supply and demand of funds in the rural financial market, broaden the channels of rural financial institutions in the use of funds, and optimize the structure of rural financial remarkable economic achievements. Microfinance have not achieve the purpose of the services for the poor. MFls sustainability is not well,and the breadth and depth of the target customer service is not enough. The practice of microfinance in China’s rural areas characterized by government administrative guidance to the main line, is carried out in government guidance and is not entirely the economic behavior of market players. Due to the lack of guarantees and collateral, poor are unable to enjoy in the traditional financial services, credit services. Therefore, those clients, who had got the microfinance loan, are initiatively repaying loan in time in sure their good credit record. China’s western region,with bad geographical and the climate conditions, sparsely populated, is a typical old, small, side, and poor areas. Taking into account the western region of the rural economy is relatively backward, the mode of agricultural production is still very traditional, farmers are generally lack of production and management of credit funds required collateral, in the western region it is of great significance to vigorously carry out micro-credit services and maintain its long-term development for the promotion of western development and narrowing the east-west gap. This paper starts from the general theory of microcredit and microfinance in the overall framework of the demand for rural finance and rural finance system. Then using of empirical and normative analysis, mathematical statistics and quantitative analysis of combination, contrast and induction methods to analyze small credit’s legal policy, the economic environment and social and cultural environment. Pointing out that the legal system and external factors such as constraints, the micro-credit project management mechanism is not perfect, governance mechanisms are inadequate and internal factors need improve.So wo shuld perfect the policy-making, industry development and institutional governance and suggestions and countermeasures to ensure the sustainable development of microfinance and the depth and breadth of microfinance’s service.In this paper there is a total of five parts. The first section provides an overview of the basic theory of micro-credit, basic elements and micro-credit practice of the status quo at home and abroad theory. The second section describes the successful experience of the international practice of rural microfinance and analyzes the success factors for our reference. The third section analyzes the supply system in rural financial markets in the western region, coverage and financial needs of the main features of the market space, and summarizes the development of micro-credit to the western region’s economic and social role in promoting rural economic growth and increase farmers’ income, further added the blank of the rural financial market, financial concepts to change the rural communities, improve the ability of farmers to improve their lives through external resources. The fourth section points out constraints of the western region microfinance sustainable development. Understanding in proper method, focusing excessive on the value of the pro-poor nature of the micro-credit, ignoring the continued development of micro-credit; market imperfections, lack of industry self-discipline, organization and coordination of industry bodies, the development state of disorder; weak ability to control risk faced by special populations of micro-credit makes itself at greater risk, but also put forward higher requirements for the prudent management of; a single financial product, the lack of supporting services measures focus on lending prior to the neglect of the prior regulatory. The fifth section give the explicit suggestions to promote the healthy development of micro-credit,to facilitate rural economic development, and to increase farmers’ income. Mainly considering how to improve the macro-institutional environment, and how to regulate the operation and management of the microfinance institutions, how to improve poor households’capacity to use credit resources to mcome-generating.