Micro-finance in Poverty Alleviation in Rural Areas of Applied Research
|School||Hunan Agricultural University|
|Course||Agricultural Economics and Management|
|Keywords||Rural microfinance Poverty-alleviation Grameen Bank Sustainability operating efficiency|
In order to alleviate poverty in China’s backward areas and resolve the problems that have existed in our credit-alleviation policy, China has begun to introduce and practice the microfinance projects since 1990’s. Because microfinance has resolved the age-old "three lows" problems (i.e. the low ratio of funds reaching the pauper, the low ratio of item success and the low ratio of returned funds) in using the poverty-alleviation funds and improved greatly the funds effects and economic benefits, this method has been hailed with extensive praise and confirmation. The author’s purpose of doing this research is that trying hard to review the practice of poverty-alleviation by microcredit in China rural, and summarizing the problems and experience existing among them, using external experience for reference on this basis, to propose constructing methods and suggestions of microfinance with Chinese characteristics.This thesis starts from the general theory of microfinance, analyses the concept and features of microfinance, and compares the two typical international micofinance models. And then, sums up the practice of microfinance in poverty-alleviation in rural China in the recent 20 years. Through analyzing the background of the microfinance promotion in poverty-alleviation, this thesis sets forth the necessity of practicing microfinance; concludes the basic characteristics of microfinance in China; and explains the positive effects of microfinance in poverty-alleviation both from macro and micro sides. On the basis of summarize and induction, this thesis puts an emphasis on analyzing the problems and reasons that existing in the microfianace in poverty-alleviation, including the two sides of exterior environment and interior regulations. For some details, such as financial restriction policy on entrance to finance market, imperfect market-oriented economy and lack of legal status of rural microfinance institutes. Low-interests-rate and lack of effective supervising systems and talents are also harmful to the sustainable development of rural microfinance. How to deal with the problems below effectively? The author puts forward the following countermeasures after reaching: (1) To perfect the exterior environment of microfinance; (2) To build a variety of microfinance models; (3) To establish interest rate rationally to ensure the sustainable microfinance; (4) To establish the suitable effective regulations for the microfinance to run and manage;(5) To strengthen the control of the microfinance in risks.Based on exact data and detailed analyses, this dissertation draws a conclusion that microfinance in rural areas is an effective means to alleviate poverty; and the sustainability of small loans to alleviate poverty are the critical factor to determine whether the system can exist and really help the poor. Loan interest rate is a key factor that affects sustainable development, the market-oriented interest rate for microfinance will be a necessary trend in China’s countryside. And the new market-oriented microfinance will be a necessary in future too!