Effects Of Regulatory Policy On Inclusive Finance In China

Since the first time that comes up with “Inclusive Finance”, especially the rise of the Internet Finance in recent years, the concept has been drawing the public attention. Recent years, various central level, the local level regulations and policies were introduced, different types of supply agencies have set up, more and more poor people start to know Inclusive Financial, all of these play as an accelerator in the development of Inclusive Finance. However, how to maintain a balance between financial sustainability and outreach of Inclusive Finance is a thorny problem in practice. For example, the overweight emphasize on outreach led Micro-finance Company’s funding dried up in 2007, but biased toward commercialization was the main reason for the Indian Micro-finance Crisis in 2010.Therefore, it is particularly important to establish a sound policy support system for Inclusive Financial System in order to maintain balance between sustainability and outreach.The development regulatory policy is to establish a sound Inclusive Financial System. In this article, through reference to the theoretical framework of the policy support system of inclusive finance, based on the analysis of the current situation and the effect of different inclusive financial regulatory policy as well as the main supply problems. Studies have shown that the current situation, China’s policy of inclusive financial regulatory system exists incomplete configuration custody confusion and market access threshold is too high and other problems, and these problems in varying degrees of inclusive financial profitability of outreach be affected. Then, we use OLS regression and IV Regression to analysis the regulatory policy’s impact on profitability and outreach. The regression results show that profit-oriented MFIs tend to absorb the costs which generated by regulations to maintain its profitability. In view of the policy support system of inclusive finance’s problems and combines the regression results, we propose to improve the regulatory policy of improving inclusive financial outreach, reduce operating costs and improve operational efficiency and so on.