Research On Operation Performance And Sustainable Development Of Micro-Credit Companies In Zhejiang Province

This paper takes61Micro-Credit companies in Huzhou and Wenzhou as research sample, trying to analyze the operation situation and new characteristic of MCC in both qualitative and quantitative methods. Given the MCC development reality, we first measure out the operating efficiency of MCC with DEA method, and then conduct an empirical analysis concerning the relevant factors that affect operating performance of MCC. The econometrical results demonstrate that the operating performance of MCC is positive relevant with the AFSS ratio (sum of agricultural loan, forestry loan, shepherd loan and fishery loan divided by the total loan balance) and funds utilization significantly. Whereas the non-performing loan ratio, administrative and managerial expenses show negative correlation relationship. This research does not find any correlation between the weighted average loan interest rate and regional difference with the operating performance of MCC. In the last part of this paper, we put forward some suggestions in aspects of both internal control and management policy of MCC.The research suggests that in order to improve the operating efficiency of MCC in Zhejiang, establishment of the efficient risk control mechanisms, development of targeted lending markets, strengthen of innovative loan methods and building up a professional staff team are required in the internal control level. As to the policy making and management improvement level, there is a necessity to broaden the financing channels for MCC to increase loan-able fund. Besides, the market should loosen the judgment standards of micro credit and gradually improve the interest liberalization level. Also, MCC should unambiguously definite its development goals and service models. In addition, fiscal support, market exit mechanism and regulatory system are all factors which should be taken into consideration for better growth.