Rural Microfinance: International Comparison And China's Practice

After the appearance of the micro finance in 20^th centry 60's and 70's, it has made a great growth in developing countries, and we have found it has proven that the micro finance is an effective way to relieve the poverty. The micro finance makes some poverty reduction projects standardized and sustaining through a new credit patten.China began to introduce and practise the micro finance projects from 20^th centry 90's. Followed the Greenbank style China's rural micro finance adopted three basic procedures: stringent targeting of the poorest, mutual assistance group and frequent loan repayment intervals. China's rural micro finance is really a kind of financial innovation, but only an imperfect one. At present China's rural micro finance are facing many difficult factors such as financial restriction policy on entrance to finance market and interest rate, imperfect market-oriented economy and legal status of rural micro finance organizations. Low interest rate, ineffective management and poor human resource are also harmful for the sustainable development of rural micro finance.In order to solve these problems, the writer tries to set up a theoretical framework which analyses the path of China's rural micro finance. The paper is composed of four parts: First, it reviews the basic concept and theories of the micro finance, investigating its function, risks, regulation and performance evaluation; Second, it introduces some successsful micro finance organizations in the world, indicating useful experiences that China should learn from; Third, it analyzes the development and characteristics of China's rural mirocredit, pointing out problems exsisting in China's microfinance system. Finally, combining the practice of China's rurual microfinance, it puts forward some innovative suggestion for a more healthy growth: On the one hand, microfinance organizations should enhance the management ability by themselves, rebuilding the operation flow, creating new products, improving the management. On the other hand, the government and financial sectors should reform relative policies and measures , increasing the agility of rural microfinance. Accordingly, these suggestion indicate a clear road for China's rural microfinance in the future.