Small Loan Company Loan Pricing Method Research

Due to China’s financial market is a seller’s market, for reasons ofprofitability,traditional financial institutions mostly focus on large,collateral and lowerrisk enterprise, for a long time, small and micro enterprises, individual businesses,lowand middle-income people’s credit demand is restrained.Subsidized loans for povertyalleviation failed to ease the credit status of supply less than demand,becauseing ofrent-seeking behavior and low efficiency.Since the1970s, microfinance develop fromBangladesh to the world, greatly alleviate that dilemma, from welfarism microfinance tofor-profit microfinance, how to realize its social value while maintaining the sustainabledevelopment get more and more attention from practitioners and academics, loan is themain business of microfinance institutions, loan interest rate directly relates its survivaland development.Unlike other microfinance institutions, small loans company can onlysupply credit business but forbid to take deposits, the threshold is low, in favour ofabsorbing folk capital, organization flexible, widely target groups, has a veryimportant role in microfinance market.small loans company is different withcommercial bank and other microfinance institutions in the enterprise nature,organization structure, business scope, funds source, operation mode and so on, socommercial bank loan pricing method does not apply to small loans companies, othermicrofinance institutions loan pricing method is not perfect and also not entirelyapplicable, exploring small loan company loan pricing method is very important andemergency.Paper analy the importance of microfinance and operational mechanism thoughmicrofinance’s development history and classification, especially pay close attention tosmall loan company, including development history,relevant policy provisions,forexample, set up conditions, financing, interest rate, risk control, etc.according to smallloans company’s specific business category and target customer group, paper combinethe existing microcredit interest rate pricing theory, consider village bank and ruralcredit cooperative’s interest rate pricing method, analy the factors influencing the smallloan company interest rate pricing, put forward small loan company loan pricing model,suggest small loan company becoming a member of credit reporting system, ratingsmall loan company’s credit,canceling financing limit and so on,so that small loan company’s interest rate can be more rational.