| With the emergence of a large number of small and medium-sized enterprises in rural areas in China, financing demand is increasingly growing. However, restricted to the rural financial service out of the designated position reach, small and medium-sized enterprises can only finance through private lending to seek their own development. Therefore, in order to guarantee the stable development of China’s financial market, private capital flows must be guided correctly. At the same time, the rural financial reform is imperative under such a circumstance. In this context, micro-finance Company, as a new financial service organization in our country, is gradually formed into a system. In2008, the China Banking Regulatory Commission and the People’s Bank of China jointly issued Instruction to The Micro-finance Company Pilot, therefore, the legal status and survival significance of micro-finance Company were further confirmed, and an important step forward for the folk lending’s smooth running was marked. However, the commercial property of the micro-finance Company determines that its working capital is mainly from the shareholders of the company, external supervision is inferior to financial institutions and sustainable operation will face many difficulties. Therefore, the article analyzed the general method for the sustainable operation of the micro-finance Company with a research object of J micro-finance Company in Yangzhou, especially with an in-depth discussion of J micro-finance Company’s sustainable operation. Based on this point, it also sorted out the required internal and external conditions of sustainable operation of a micro-finance Company, thus the useful policy suggestions for sustainable operation of the micro-finance Company of our country were of strong significance both theoretically and practically.The aim of this essay is to analyze micro-finance Company sustainable operation combining successful experiences of foreign micro-finance Company through literature analysis, case analysis,"survey interviews" as well as other research methods. The study shows that the sustainable operation of micro-finance Company requires many sided combination. First of all, in the terms of institutional environment, a broad business scope, a strong support, a regulatory policy and a reliable credit environment should be afforded. Second, in the terms of internal control, micro-finance Company should clear its market positioning to improve the risk-control mechanism and governance structure and the management level of company. As for the terms of business model, micro-finance Company should expand business varieties, observe business rules and formulate flexible loan interest rate, loan amount and length of maturity according to the economic strength of the prospective borrower.With the analysis of the data of sustainable operation survey of micro-finance Companies in Jiangsu Province as well as J micro-finance Company in Yangzhou, it can be concluded that:In terms of the institutional environment, Jiangsu Province has launched a series of preferential policies for micro-finance Companies. However, weak restriction of policy and incompatibility of credit system were also existed. In the aspect of internal control, micro-finance companies in Jiangsu Province have a clear definition about their roles, reasonable governance structure, and prudent management idea. In the terms of business model, micro-finance companies in Jiangsu Province generally have standardized business processes, appropriate length of maturity and interest rates, while the funding still remains to be further enriched. For example, as an individual firm, Yangzhou J micro-finance Company fails to fully enjoy preferential policies in Jiangsu province, it faces problems such as unclear legal status, low social recognition level as well as the problems for multi-Regulatory. Furthermore, on the account of restriction of cooperative institutions and clients’resources, its main business revenue still comes from traditional loans. Moreover, J micro-finance Company has problems on internal control and poor management of liquidity. As a result of the inadequate risk-control measures, the company had a significant losses in2013, there were a large gap between the goal of sustainable operation.Based on the above survey and analysis, some policy suggestions for micro-finance Company sustainable operation have been put forward as follow: first, the support and the regulatory system should be increased and improved, and the industry association should be set up at the same time to earnestly protect interests as well as provide full-service with micro-finance Company. Second, the financing channels should be broadened and financing proportion should be adapted through the improvement of the internal governance structure to improve the management level comprehensively and guard against operational risk effectively. In all, a series of measures should be put in place to accelerate building suitable external environment for micro-finance Company’s development, and to promote micro-finance Company’s real core competitiveness of sustainable operation. Only by this way, the sustainable operation of micro-finance Company can be achieved. |
