Cost-effectiveness Study For The Microfinance Of ZK Postal Savings Bank

With the development of rural finance，The rural financial market has increasing demandfor microfinance, The traditional microfinance agency cannot completely satisfy therequirement of rural for money, In the meantime, the four nationalized banks will graduallyshift their work center to the rural financial market. Therefore, Postal Savings Bank of Chinahas a good development prospect on microfinance. As always, The main focus of PostalSavings Bank of China is rural financial market. Providing microfinance services for ruralresidents is an important means of supporting the development of rural finance. PostalSavings Bank of China has a wide range of network advantages in urban and rural areas.Atthe same time, it owns large market of development, well-funded, and well-deservedreputation advantages which promote microfinance to carry out and increase strongdriving force for rural economic development.The microfinance’s rapid development of abroad has drawn great attention of thedomestic. As well known, Post office bank is the pioneer of microfinance business in China,Since the sites began in December2005, the development is rapid, effect is good, butproblems also began to emerge. National convenient policy is not smooth, its operationcost is high, the repayment mechanism is imperfect, lacking of business pertinence and thepost office staff work quality result in its high operating costs and low income, finally, thisphenomenon is not in conformity with the bank’s development.The microfinance of Postal Savings Bank of is seemingly in the development of thriving,but there are prominent problems. the ZK Post office bank’s purpose of doing microfinance isprofit, but from the data analysis, it is concluded that in some areas, the microfinance reliesmainly on the national policy,because from the stand of bank,this business doesn’t conformto the principle of cost effectiveness, from the perspective of the bank shareholders, thepursuit of the ultimate goal is profit maximization, however, the fact that earnings ofmicrofinance is low or zero limits the post office bank’s sustainable development on thisbusiness.Therefore, In the feasible range of national policy, finding out the problem, puttingforward feasible Suggestions, ensuring the implementation of the national policy, improvingthe management process and mechanism of repayment, improving business, and strengthening pertinence of microfinance,utilizing its own unique advantages to develop thisbusiness and reducing business cost are the main aims of this paper.