Anti-poverty In Rural China: The Rational Consideration On Choosing The Mode Of Folk Microfinance

Reducing the gap between the poor and the rich is no doubt the most important problem for China. A famous economist Lin Yifu has stated: "The key inconsistency of the gap between the poor and the rich in China is not on that the rich being too rich, but on that the poor being too poor. ",which pointed out the key of the problem. In order to solve the problem, China has to make the incoming of the poor increase faster than the rich. The poor population in rural China is about 200,000,000, which is calculated according to the standard of ((2000-2001 World Development Report)) presented by the World Bank. The rural China is becoming the "worst disaster area"of poverty. China has a rural population of 900,000,000, the Well-off Society will not be all-round completed without the Well-off of peasantry. The ultimate goal of common prosperity will not be accomplished if the gap between the poor and the rich is not reduced.Capital plays a key role in the development of economy and shaking off of poverty. The credit is one of the most suitable source of funds for the country especially poor peasantry to shake-off poverty and increase production, when compared to financial investment and social donation. In the mid-late 1990s, assisted by international organization, the Chinese anti-poverty system brought in a successful poverty reliefcredit system——the Grameen Bank(GB) Microfinance. After testing for more than 10years, microfinance is proved to be the most powerful and effective tool for eradicating poverty. But the development of microfinance was not acceptable in China: the interest-deducted loan of Agricultural Bank Of China is effectless, the loan-save ratio of Rural Credit Cooperatives is increasing year by year, the sustainable development of informal financial microfinance is stucked in trouble. The utilization of folk funds is a new direction of anti-poverty, and the GB microfinance mode is one of the successful examples of the international anti-poverty mode.Whether the combination of the two will alleviate poverty or not, and how to choose the mode, which leads to solution of rural produciton funds and sustainable development of microfinance, will be discussed below. There are five chapters:Chapter 1 is an overview of the credit's infection to incoming and microfinance theory. Chapter 2 introduces the sucessful example of anti-poverty by microfinance in the developing countrys, analysing the Bengal and Indonesia microfinance mode, digging out useful insperation. Chapter 3 "The performance analysis of existent microfinance mode in China ",analyses the microfinance modes in China, finding out the root of the problem. Chapter 4 "Anti-poverty effect of folk funds and analysis of folk microfinance company mode", point out a new direction for poverty relief microfinance. Chapter 5 "Rational consideration on choosing the mode of folk microfinance", based on the analysis above, conceives a general framework for folk microfinance mode, according to the existing fact in rural China.