Study On The Development Of Microfinance In Rural China

The microfinance helps to alleviate poverty and promote employment. Chinesemicrofinance has a great development in the past20years history. Especially after2005, with the promote of the Chinese Government, with the support of the ruralcredit cooperative microfinance projects, with the development of thenon-government microfinance institutions, microfinance has made great development.The rural finance has had unbelievable achievements. However, the development ofthe Chinese microfinance are still unable to meet the requirements for the ruralmicrofinance’s development, and there are still lots of problems to face..This paper summarizes the related research, and summarizes the theory of rural microcredit. Then it analyzes the characteristics of the demand side and supply side ofChina rural microfinance, and finds out some problems and deficiencies existed,including: lack of carrier of microfinance, limited sources of microfinance funds andmicrofinance institutions problems, especially the low level of interest rates is animportant factor to realize the sustainable development of microfinance. As a casestudy, this article takes the Shandong province Huantai County as an example, usingthe Rosenberg model to analyze the interest rate pricing of rural micro credit. Theconclusion is that only the high interst rage can make up for the microfinanceinstitutions operating cost. Finally, this paper draws on the experience of foreignmicrofinance, and puts forward some suggestions and countermeasures to developthe rural microfinance of China.