Research On The Development Of Micro - Credit Companies

Micro-credit system is an innovation of financial system in the development of China’s rural economy, whose successful practice worldwide shows that micro-credit can reach a balance between its double missions:financial services and poverty alleviation policies. Since the year2000when some state-owned commercial banks started their withdrawal of rural branches, rural financial cooperatives and postal savings bank become the main organizations existing in the rural financial market. The shortage of credit supply and lack of financial services has become a universal problem in rural financial market. In order to solve this problem, the government has worked out a lot of financial innovations such as encouraging the establishment of micro-credit companies, rural fund cooperatives, and new village banks. As a new rural financial organization, the micro-credit company is crawling its way between the commercialization development mode and three-rural-support orientation. In nearly5years, commercial micro-credit companies have made many achievements, playing a certain role for the prosperity of rural financial market, But due to the system barrier arising from the absence of relevant laws and immaturity of institution, the micro-credit companies are facing the legal problems such as ambiguity of target location, deviation of capital use, inefficiency of risk prevention mechanism, and defection of supervisory mechanism etc, which have seriously restricted the healthy development of micro-credit company. Though in2009the CBRC issued a "Interim Provisions on Restructuring Micro-Credit Companies into Rural Banks" to provide masses of the micro-credit company a new direction, none of the micro-credit companies has been converted into a village bank, which has an objective factor:their establishment ages are too young to meet the restructuring conditions in CBRC Interim Provisions, especially the establishment item. But more important is the subjective factor that most of the micro-credit company’s shareholders would not like to do so.This article is precisely based on the basic concept, development history and current situation of the micro-credit company. After making a distinction in the aspects of basic properties, business scope and supervision mechanism between the micro-credit company and traditional commercial bank (especially the rural bank), this article makes a comparison in their financial indexes with Du pont analysis, analyze their different prospects with economic profit index and probe the actual reasons of financial index differences. After the feasibility analysis of micro-credit company restructuring, this article also analyzes the reason why micro-credit companies would not like to be restructured, points out its policy barriers and difficulties, aiming to solve their sustainable development problem of restructuring or not. This article finally tries to seek a kind of method which can not only improves micro-credit companies’net asset profit rate and growth ability, but also maintains their operating efficiency and profitability of method and discovers an optimal development road.