The Study On The Commercial Business Of Micro-Finance Institutions In China

The original intention of the Micro-financial institutions is to help the poor and develop the economy. With suitable financial service and system, the Micro-financial institutions can provide the poor and Micro-enterprises with sustainable financial service, so as to achieve the purpose that all of the whole crowd all walks of life can enjoy their own financial services. After nearly 40-year-development, many developing countries has made many meaningful attempts and their experience is helpful to eliminate poverty. However, in China, most Micro-financial institutions are in the primary stage. Though they have some problems in development, they have great potential to improve and develop.Based on the the foreign experience about the sustainable development of Micro-financial institutions and Chinese actual conditions, the paper, with comparative analysis of research method, points out that the Micro-financial institutions in China is still in the initial period of sustainable and commercial operation. There are many problems in the operation, such as costs, funding sources, loan interest rate, risk management and control, and all of the problems needs to be solved urgently. But, the developing trend is in pursuit of sustainable business. In order to solve the above problems, the paper proposes the countermeasures:the implementation of the lending rates of commercial operation is based on the benchmark lending rate with floating interest rates, how to broaden the sources of funding and improve the credit management mechanisms.The conclusion of this paper is that it is workable for the Micro-financial institutions in China to implements the sustainable commercial operation, which not only can keep the purpose to help poor, but also can help the institutions function healthy and regularly with its own cash flow cycle. So, the Micro-financial institutions can provide the poor with much better and suitable Micro-financial services.