Research On The Development Of M BANK’s Small And Micro Credit Business

There were about 73.28 million small and micro businesses nationwide by 2016.Although 70 million may seem like a small scale,its development has been vigorously supported by Chinese government.In 2014,its annual output value reached 19.08 trillion Yuan,accounting for 30.0% of total GDP.Small and micro businesses play an increasingly important role as a driven force for the development of national economy.In 2014,a total of 237 million people were employed by small and micro businesses,accounting for 30.7% of China’s total employed population.Hence small and micro enterprises play an indispensable role in supporting innovation-based entrepreneurship-oriented enterprises,attracting employment of migrant workers,boosting urbanization,improving economic and industrial structure,promoting constant economic growth and maintaining social harmony and meeting residents’ needs.Small and micro enterprises have contributed a lot to the national economy and the state has been supporting and encouraging the development of small and micro enterprises,however,the conditions of small and micro enterprises are still not optimistic.According to the central data,around 9.28 million small and micro businesses withdrew from the market in 1994.One of the most important factors is that the financing problems of small and micro enterprises have not been solved.And with the gradual development and expansion of small and micro enterprises,this issue became more obvious and serious.By the end of 2015,the number of small and micro business loans balance is 13.226 million,1.78 million more than the same period of last year.By the end of 2016,the loan balance of small and micro enterprises in national banking financial institutions reached 26.70 trillion Yuan,accounting for 25.05% of the total loan balance(106.6 trillion Yuan).Micro-credit means: the needs which arising from the direct operation of the business or derivative from the credit business for small and micro enterprises or their business owners,shareholders and other related parties.The credit needs of small and micro enterprises are characterized by "short,small,frequent and urgent",which are more similar to those of retail loans.Compared with other businesses of banks,the small amount of individual loans and the high operating costs of the small and micro enterprise loan business make many banks unwilling to invest a large amount of manpower,material resources and financial resources in this business.As a result of increasing the difficulty and barriers of formal financial institutions in intervening in small and micro credit businesses,small and micro enterprises became even harder to get money and to survive.At present,China’s research and practice of the small and micro credit is still in the exploration stage.Regardless of organizational structure,product design,market positioning,customer marketing,business processes,business philosophy,risk management and other aspects,they are more likely to resemble the traditional credit business.However,under the conditions of our country and market environment,that kind of credit business does not apply to the current micro and small enterprise.At the same time,as the micro-credit business involves nearly all industries in the market,the complexity of their structure,the diversity of their customers(various kinds of business activities are reflected in the small and micro credit),the uncertainty of loan auditing standards,the excessive conservativeness of lending policies of financial institutions,high marginal costs and difficult management,the lack of scale advantages,non-standard financial system and insufficient collateral all make small and micro enterprises difficult in applying for bank loans.There are still many difficulties and obstacles that have not been solved or even been found in the current small and micro credit businesses in our country.Solving these problems will do help to further promote the healthy and rapid development of China’s small and micro credit businesses.This paper is written on the base of business management knowledge and related financial management knowledge,as well as on the base of the author’s six years’ micro-credit experience.Firstly,the paper put forward a question and point out the research significance(including in theory and in practice);secondly,this paper analyzes the research status and development trend of the micro-credit at home and abroad.Based on these above,it points out that the current solution to the problems of the small and micro credit business in our country could not completely copy the historical experience of other countries.What’s more valuable is to find a solution that meets the specific situation of China.This paper carries out the analysis with several classic cases,which happened in the author’s institution and region.By discussion and analysis of these cases,the paper points out the current problems existing in the small and micro credit business in the main body of the market.And then the paper gives the corresponding solutions to these problems.To better fit the status of China’s small and micro enterprises,the paper focuses on the qualitative point of view to put forward some suggestions in favor of the development of small and micro credit.