The Sociological Analysis On The Impact Of Corporate Social Capital On Microfinance Companies

Since China issued the policy statements about the microfinance company in2008, it has become a new legal channel that the folk capital merges with thesocial circulation. Within a few years microfinance companies spring up gradually.They not only get legal status, but also think about the future of themselves,which are worth exploring and thinking over for us. The enterprise managers playan important role during the establishment and development of microfinancecompanies because the development of them is late, the system of internalcontrol is not standard, the degree of social cognition is low, the market pressureis heavy and their management business and establishment process haveparticularity in China. Moreover, the enterprise managers are the core of theenterprise and on behalf of the enterprise to make decision. The total socialcapital of enterprise staff is displayed by the decision of enterprise managers andthe corporate social capital is also represented by the social capital of enterprisemanagers. Although the research has been more mature that studies therelationship between corporate social capital and the enterprise economic benefitin each discipline, a simple analytical framework of economics can not fullyexplain the success or the failure of a business. Thus, this paper adopts thepattern of the sociological analysis to study the impact of corporate social capitalon the microfinance companies.This paper is a qualitative study, combining with the observation method andinterview method to discuss the impact of corporate social capital on microfinancecompanies. During the previous phase, some relevant documents have beenreorganized in order to get better known the research outcomes in academiccircle presently; during the medium phase, it has been carried on that researchers investigate on-the-spot and go into daily operations of the firm to observe and findout problems; during the final phase, empirical data are analyzed andsummarized with using the theory and research framework of sociology. In thisprocess of analysis, based on social capital theory, it takes the Jilin GMicrofinance Company Limited as a case. Furthermore, borrowing the analysismethod of corporate social capital from Bian Yanjie, viewing from the viewpoint ofcorporate social capital and this three aspects—the horizontal contact, thelongitudinal contact and social contact of enterprise managers, going throughentrepreneurial initiative to examine corporate social capital, and basing on thistwo factors—the access to information and funds, this article investigates theimpact of corporate social capital on construction and development ofmicrofinance companies.This study comes to a conclusion that the corporate social capital is a keyfactor to affect the establishment of G Microfinance Company. In the developmentof the company, the corporate social capital increases market opportunities for Gmicrofinance company, reduces the costs of trade, provides financial support,weakens the risks which bring from the credit business itself to the developmentof the company, improves the economic benefit and management ability of thecompany, realizes the expectation of widening size and raising income. The paperemphases on that microfinance companies benefit from corporate social capital.At the same time, it also points out that the negative effect of the corporate socialcapital for microfinance companies. At the end of the paper puts forward threetentative suggestions for the development of microfinance company—buildinglong-term social capital investment and establishing a social credit cooperativeorganization and so on.