Microfinance Development Research In Our Country

Microfinance is a kind of financial service provided specifically to low-income groupsas well as small and medium enterprises (SMEs); it is a new type of financial systemdeveloped from the traditional and formal one. Microfinance institutions and services hasdrawn the whole world’s attention and has caused growing concern and discussion amongcountries since Muhammad Yunus, the Bangladeshi banker who developed the concept ofmicrofinance, received the Noble Peace Price in2006for his unremitted efforts throughmicrofinance to create economic and social development from below and lift millions outof poverty. From the prototype in1970s to the present’s mature and systematically,microfinance has made tremendous contributions to rural development and povertyalleviation in both developing and developed nations worldwide.The development of microfinance in China began in early1990s. At present, themain microfinance service in our country is microcredit; since the scope of its services isbeing gradually expanded, China is also trying to combine other services, such asmicro-insurance, to make our microfinance more complete and efficient. From the initialexploration to today’s being widely accepted, it has successfully proved that Chinacontains a vast market and great opportunities and potentials to develop microfinance.After nearly two decades of development, it has showed us that microfinance caneffectively alleviate the Three Rural Issues, and help people get out of poverty;additionally, it can support our SMEs in China as a protector and sponsor; moreover, it canalso provide working positions and increase employment, improve the quality of regionalfinancial services, etc. In a word, microfinance can tremendous benefit our society.However, there are still many problems in China during the development ofmicrofinance, for example, the interest rates of microcredit has not yet becomemarket-oriented; the operation of microfinance always carries a higher risk; the fundingsources of microfinance institutions are not broad enough; and relevant regulations andsupervisory measures are yet to be completed. If such problems cannot be addressedeffectively and quickly, they will definitely become massive obstacles in the futuredevelopment of our microfinance.After recognizing the existing problems of our microfinance, this article proposed thesuggestions for the deepening development of microfinance, through studying the successexperience of foreign microfinance and considering our national conditions, as follows:1. Adapt the operation of microfinance to local conditions;2. Implement the interest rate ofmicrocredit to market-oriented;3. Strengthen the risk management of microfinance inorder to share risks effectively;4. Broaden the financing channels;5. Encourage theinnovation and the diversified development of microfinance products;6. Improve,strengthen and complete the legislations as well as the public policies. We look forwardto finding that, with the continuous probing and perfecting, microfinance can be used tobenefit more and more poor people and can make more outstanding contributions toChina’s economic development.