The Microfinance Research

Microfinance is one of the most effective way recognized internationally to help poor people out of poverty, especially poor farmers. It is an important financial innovation in developing countries. It is also an important opportunity of the development of rural finance in China. Empowerment of rural finance serving for agriculture is one of the priorities of "Three Rural Issues", which is the key to building a socialist new countryside. Targeted clients of microfinance are poor households, characteristics of mircrofinance are small credit lines, short-term, flexible mortgage-backed approach. Microfinance in China rose in 1993.In the next ten years, microfinance in China has developed from pilot properties of small areas to large-scale commercialization of multi-mode operation, from learning broad international mature operation mechanism and the classical theory of microfinance to establishing microfinance system in China which is adapted to China's national conditions. The goal of microfinance expanded "the poor" areas to broader areas of "the general farmers and small business services". Microfinance as a financial model, the basic elements of its operating mechanism, including: the choice of target customers, microcredit organizations, a range of innovative institutional arrangements. Innovative microfinance mechanism is embodied in the alternative collateral, repayment incentives, repayment method, interest rates and other aspects. Domestic technology and the specific operation of microfinance are still insufficient. We need learn from the foreign countries more.In these years, the microfinance has higher status in rural finance, the organizations of our country to carry out microcredit and their scale has grown. Microfinance organizations in China are mainly four categories:formal commercial financial institutions, government agencies to promote microfinance, micro-credit companies and non-governmental organizations (NGO). These micro-credit institutions are quite different in the institutional arrangements, funding sources, mechanisms and other aspects. Different organizations have different measures and reforms in future development.With the continuous development of micro finance, operating mode and business objectives were changing. Government has also re-located, changed their functions. The government's administrative power of intervention should be "diminished" in this stage. Government give adequate support, but maintain the independence of running microfinance institutions. Focus should be on the process of commercialization of microfinance, strengthening its support system construction and environmental optimization. It is including a sound legal and policy system of microfinance, construction of rural credit system and good macro environment.In this study, research status quo of microfinance in China, combined with experience of different organizations in different forms of foreign microfinance project. Analyse the operating mechanism elements suited China's national conditions and the mechanism choice of microfinance institutions with different organizational structures. Finally research the role of the government in the field of microfinance and put forward policy recommendations.