How Do I Choose the Best Microfinance Fund?

The International Microfinance Year refers to the United Nations 'International Year of Microcredit (2005) as the United Nations' "International Microfinance Year" in order to promote the achievement of the MDGs. This is also an opportunity for the financial services industry to further develop the market.

International Microfinance Year

The International Microfinance Year refers to the United Nations 'International Year of Microcredit (2005) as the United Nations' "International Microfinance Year" in order to promote the achievement of the Millennium Development Goals. This is also an opportunity for the financial services industry to further develop the market.

Chinese name

International Microfinance Year

Foreign name

International Year of Microcredit

Purpose

Promoting the achievement of the Millennium Development Goals

Time

In 2005

The formation of the International Year of Microfinance.

In the 1990s, some large-scale international conferences and government gatherings began to discuss the direction of global development in the new century, and established some relatively clear goals, called "international development goals." In September 2000, the United Nations consolidated and renamed these goals "

Five main goals of the International Year of Microfinance.

Assess and promote

On November 18, 2004, the United Nations launched the first global microfinance campaign-the International Year of Microfinance 2005.

"Microfinance is a new

Diversified Microfinance Development Model

Microfinance originated from informal financial organizations. Microfinance Project Development and

Microfinance success

Successful commercial sustainable microfinance institutions should have two conditions at the same time: one is that the project has

Problems Existing in China's Microfinance Development and Improvement Directions

International Microfinance Year

Beginning in the early 1990s, in order to help the Chinese government solve the problem of low poverty-tolerance loans and low repayment rates, some international institutions and domestic non-governmental organizations have begun to explore the introduction of microfinance to make it easier for poor farmers. Easy access to financial services. Subsequently, more and more international multilateral and bilateral aid agencies became interested in microfinance and invested considerable funds in pilot projects. The government's poverty alleviation departments have also gradually realized the effective role of microfinance in poverty alleviation, and have invested some poverty alleviation funds in the form of microcredit to poor farmers. At present, China mainly engages in microfinance with the following institutions: microfinance projects funded by international development agencies and non-governmental organizations, government-led microfinance poverty alleviation projects (generally operated by the Agricultural Bank, Poverty Alleviation Office and Poverty Alleviation Associations) and rural credit cooperatives Microfinance business. Non-governmental organizations and government-led microfinance poverty alleviation projects are all single-project models, with funds mainly relying on external supply and are not sustainable. Most of the microfinance employees are part-time, and there is no guarantee of organization for microfinance operations. It is impossible to innovate in the management mechanism, but it is a form of copying the international practice.

With the years of experimentation of microfinance in China, the question of how to establish a sustainable microfinance system in China has been raised objectively. After experiencing the setbacks of large creditors, the rural credit cooperatives have repositioned the market and made microfinance the focus of their business development. However, there are still many places in the credit cooperatives that need to learn from international best practices.

The government-led microfinance poverty alleviation project and the microfinance business of rural credit cooperatives are subsidized microfinance, which runs counter to the direction of international microfinance. If financial institutions do not initiate microfinance on their own initiative, they will not be able to innovate. In addition, rural credit cooperatives engaged in microfinance have begun to put competition pressure on the microfinance of some foreign NGOs with relatively standardized operations. As the rural credit cooperatives can get discounted agricultural loans from the central bank, the cost is low, and the loan interest rates are much lower than the microcredits funded by foreign non-governmental organizations. Foreign NGOs fund microfinance and other phenomena.

At present, the massive outflow of rural funds and the monopoly pattern of rural financial markets are two prominent issues in rural finance. The development of microcredit loans that do not absorb deposits in rural areas will not only help create an effectively competitive rural financial market, but also help alleviate rural capital outflows and solve the problem of difficult loans for farmers and micro-enterprises. The pilot microfinance organization is an important part of the overall rural financial reform, and it will definitely promote other rural financial reforms, and it is especially helpful to promote and improve the governance structure of credit cooperatives.

To promote the development of microfinance in China, we must follow a diversified microfinance development model. We must promote the development of microfinance organizations that do not absorb deposits and encourage financial institutions to carry out microfinance business. At the same time, the government should formulate a policy environment suitable for the survival and development of microfinance institutions.