China's Development Model Of Micro-credit System

China's socialist market economic system requires a good many of participants in the micro-market,and tools to support the macro-control and policy of the market. The interaction between planned and market economy ensures the socialist economic system to run healthily. There is a trend in the competition of the micro-market players,that is the increase of minor enterprise players and the rise of independent start-ups. According to the Marxist theory,competition can not only optimize resource allocation,but also can deal with the relationship between fairness and efficiency. The increasingly emerge of small and medium enterprises promotes the need for capital. But how to distribute the capital (in a planned way,or an administrative way,or market-oriented way),becomes an unavoidable problem both in the practice and academy of economics. Small loan arises for the need of money too. As a newborn thing of socialist market economy,small loan faces problems,which mainly are the future development patterns and prospects,which are also issues that we reflect on.After the global financial turmoil , China's economy shows signs of recovery. Nevertheless,our minor enterprise suffered the biggest impact in this financial crisis,and showed varying degrees of decline in market share,falling rate of profit,limited financial channels and poor capacity to resist risks. On the other hand,our employment groups suffered varying degrees of employment crisis too in the global financial crisis. With more and more unemployed man,the majority of who choose sole proprietorship or start-ups to get over the hard time,how to get the starting funds becomes the key point of the problem. Therefore,the development of micro-loans can not only provide enterprises financial channels,but also can increase opportunities to start businesses and ease the unemployment pressure. The theory exploration of micro-credit in foreign countries has advanced for decades of years; meanwhile the real micro-credit is just starting its way in our country. Through the theoretical overview and comparison we can see our own characteristics and also weak points of our micro-credit.From the micro perspective, China's current micro-lending institutions or similar market competing players involve commercial banks,credit unions,small loan companies,pawn shops,private micro-lending institutions,loan-sharking,etc. And the previous research studies focused on the related institutions or systems; so there is a gap of the research in the area of market strategies and prospects of the micro-credit. In view of the various elements of the market prospects,we discussed the market potential,product prospect and competition environment of micro-credit in this paper,taking POSTAL SAVINGS BANK OF CHINA,whose micro-credit runs most successfully,as the targeting example. In the matter of market potential,the recognition of products still needs to be raised,and the mortgage,joint policy holders and secured households are the major obstacle to the development of micro-credit; In risk,I use the credit 6C model to discuss the risk of micro-credit,and the 6C means the following elements of the borrowers: the character,the capacity,the existing capital,the collateral,the condition of operating and the continuity of the business; In competition environment,I analyze the relationship between the similar or homogeneous competitors in different latitudes and directions of Postal Savings Bank of micro-credit by the five competitive forces model. And in the end I raise some recommendations on the product itself and the executive summary.From the macro perspective, this paper considered the development models from three aspects. Governments need to change their functions from the command into a guide. On the one hand, they must change the old "poverty" concept, and on the other hand they must strengthen the infrastructure of rural and backward areas; For strengthening the environment, we should introduce the relevant policy to encourage micro-credit institutions and financial services to liberate rural financial market. And we should encourage developing village banks, small loan companies and other financial services. Legislature should strengthen laws and regulations. In the open financial market, improving relevant laws and regulations is necessary.