The Current Supply of Microfinance Services in China

The article describes the supply of microfinance services in China. It also describes sources of funds and challenges faced by microfinance providers. Currently, microfinance in China is provided by:

• NGO MFIs that operate in poor rural areas and use the group lending methodology;
• Subsidized microcredit projects for poverty alleviation developed by state-owned banks focusing on rural poor through group lending methodology;
• Rural Credit Cooperatives providing credit loans, group guarantee loans and collateral-based loans;
• Microcredit project implemented by urban commercial banks and guarantee companies disbursing micro guarantee loans to unemployed workers in urban areas;
• Credit-only microcredit companies targeting faming households, citizens, sole proprietors and entrepreneurs;
• Village banks that operate only within selected counties or towns;
• Rural Mutual Credit Cooperatives that are cooperative or shareholding cooperative finance institutions which target local farmers, citizens and enterprises that are both owners and clients of funds;
• Subsidized microcredit project for poverty alleviation implemented by rural financial institutions;
• Postal savings bank microcredit pilot project that offers microcredit with a time deposit as collateral;
• Commercial bank microcredit pilot project that targets microenterprises and disadvantaged people who have difficult obtaining loans.