Status Investigation And Countermeasure On Mission Drift In Microfinance Corporation:Data From Jiangsu And Zhejiang Provinces

Microfinance Corporation social goals are lending to alleviate poverty and serve low-income groups. However, with the evolution of the commercial trend, Microfinance Corporation is easy to abandon the poor and low-income people, but keen on affluent populations, therefore, Microfinance Corporation has the tendency of mission drift. China’s rural financial system is imperfect, so financial services are insufficient and the phenomenon of financial repression is widespread existing in rural areas. China requires the reform of rural financial system and vigorously develops inclusive finance. Under these circumstances, Microfinance Corporation should sometimes hygiene.The policy intention of establishment of Microfinance Corporation is to serve "three rural" and smallµ businesses. The paper systematically reviews the related documents about China’s development of Microfinance Corporation, and then analyses the current policy environment for Microfinance Corporation’s development.Learn from international experience, the paper designs standard for evaluating mission drift in Microfinance Corporation, and points out the performance that mission drift may show. The paper analyses the mission drift in Microfinance Corporation using the related data of Microfinance Corporation in Jiangsu and Zhejiang provinces, the conclusions show the average loan size is too large, the loan interest rate exceeds the target customers’support ability and doesn’t in accordance with the provisions of the regional policy, most of the Microfinance Corporations set up in the city or town and their service object is small and medium enterprises. The development of Microfinance Corporation has deviated from the original policy, and mission drift is rather common.Error in the motivation for the establishment of institutions, system design flaws, lack of a unified national evaluation system, financial regulatory framework varies, inadequate internal control mechanism have contributed to the development of deviation in the process of development of Microfinance Corporation. And the development of deviation includes irrational, agriculture target offset, too commercial and frequent irregular operations. Therefore, we should clear legal status, layout reasonably, increase fiscal policy support, strengthen internal control system, improve the regulatory system, reduce the transaction cost, pay attention to the word of mouth marketing, enhance business innovation, so as to effectively govern mission drift issues of Microfinance Corporation.