Study On Microfinance’s Commercialization And Its Impact On China

Since the early1990s, with the introduction of microfinance, microfinance in Chinahas helped poor farmers to develop production and get out of poverty. Moreover,microfinance has made an important contribution to ease the tense situation of supply anddemand in the rural finance, and promote the "three rural" development and the ruralfinancial system reform. With the rapid development of China’s microfinance,microfinance in China is also faced with the problem of sustainable development. In theface of the trend of international microfinance commercialization, microfinance in Chinaalso keeps up with the commercial development to pursue its own sustainable development.Based on in-depth analysis on the international and China’s microfinancecommercialization, this paper makes useful exploration of the impact of microfinancecommercialization. We select77microfinance institutions and their2009-2011panel datato analyze commercialization microfinance’s impact on social performance and financialperformance. The research results show that the commercialization of microfinance have anegative impact on social performance and have a significant positive impact on financialperformance. Then, we use three specific cases including CFPA Management Limited,Shanxi Yongji Fuping micro-credit company and Ningxia Huimin micro-credit company toanalyze the impact of microfinance commercialization. Finally, the paper proposes policyrecommendations for the commercial development of microfinance.The research of the commercialization of microfinance and its impact is not onlyconducive to the operation of the commercialization of microfinance in China, but also topromote the sustainable development of the institutions. Furthermore, through thesustainable development of the microfinance institutions, they could expand the coverageto solve the "three rural" problem, the poverty problem, the employment problem. In aword, this research has a very important practical significance in improving the ruralfinancial system.