A Study On Loan Business About Circulation Shares Of China’s Micro Credit Companies

With the rapid development of China’s economy since the reform and opening up, there are a lot of opportunities and challenges for the financial institutions. A great amount of new financial institutions and products were created to match the increasing market demands. The micro credit companies appeared in the financial market as the product of financial innovation in China as well as the signals of private capital’s entering.However, under the macro economy recession of 2013-2015, the micro credit companies have to face with great risks and intense market competition. Due to the main customers of the micro credit companies were small and medium-sized enterprises, the risks prevention of these companies capacity are extremely vulnerable. These crisis may lead to great threats to the original business of the micro credit companies. In the current economic climate, therefore, China’s micro credit companies are facing with the topic: looking for business innovation.GT company is a typical micro credit company in Guangzhou which also faces the problems. GT company won a lot of small and medium-sized enterprises customers with better and faster services than the commercial banks during these years. However, the customers of GT were affected when the macro economy was getting worse, which also brought huge threats to GT. The original business model was not suitable for the changing situation, the Financial Innovation should be necessary.This dissertation is to use GT company as a case study and apply related financial innovation theories and author’s experience to analyze the problems of GT company. data analysis and examples demonstration would be used to illustrate the solutions GT used and the innovative capital market business GT have attempted. Through analysis and argument, GT find that the loan business about circulation shares would be a potential and important direction for its development. The practical example of GT would indicates the detail and necessary risk control methods in this process, which would be most significant in this creative business.This dissertation is aimed to help GT company use reasonable method for business innovation at the same time to offer reference for other China’s micro credit companies which faced the same dilemma as GT company.