An Analysis Of The Sustainable Development Of The Small Loan Companies In China

Microfinance was quickly extended to many developing countries in Asia, Africa and Latin America after born in1970s, in Bangladesh, in order to solve the problems of poverty in many developing countries and even developed countries.As early as in1993, the Rural Development Institute of the Chinese Academy of Social Sciences introduced the Grameen Bank model of microfinance, microfinance began to pilot in some areas of rural in our country, the goal was to solve the problems of poverty, improve the farmers’ economic level and narrow the gap between the rich and the poor. However, studies have shown that the development of microfinance in China is barely satisfactory.In first of all, this article introduced purpose and the meaning of the research. It analyzed the small loan companies in China from practical aspect and found the main problems of these companies:lacking of funding sources;operating costs remains so high; corporate risk mechanism is weakness; lacking of effective policy support and supervision; industrial distribution is unreasonable and so on.Then this paper found out the advanced experiences of Temasek micro-credit model by interviewing stuffs of Fullerton Credit Co., Ltd. It has lots of advantages in the business of microfinance. It has strongly financial background to ensure adequate funding. The standardization of the process, the continuous expansion of the scale can effectively reduce operating costs. At the same time, Temasek has the most advanced IT systems and information screening mechanisms, can control the risks effectively.Meanwhile, in order to understand the micro and small enterprises’demand for loans more deeply, and thus explore the market adaptation in Temasek micro-credit model, the author visited Fullerton’s first pilot area in China-Chengdu Lotuspool Wholesale Market, collected the survey data by interviewing the local businesses. By analysising the data through questionnaires, the author found that though China has lots of financial industry to carry out the business of microfinance, there are still some small enterprises and individual’s financing needs are not met.At the end of the article, the author took some suggestions on how to improve the Temasek micro-credit model, how to develop the small loan in our country as well as how to build sustainable development of microfinance environment.