Report About China’s Micro-Loan Industry
Report about china’s micro-loan industry
Program: Financial Services
Introduction:
This report is focus on the micro-loan industry in china. In this report, the subject will be divided into two parts: The first part will use Porter's five forces model, trying to research and analysis the industry status quo. The second part will base on a specific micro-loan company and trying to find out the development and the corresponding strategies of china’s micro-loan company.
Background
“Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.”
Gabriel Montes-Rojas (2009). The Economics of Micro-Finance, CITY UNIVERSITY LONDON.
Be different from the international definition, the definition for micro-loan in china is more like a combine with the Micro-loan and SME finance. As the large state-owned banks prefer to lend to large state-owned enterprises, also the cumbersome approval process and asset-backed lending requirements, the SME also exists great difficult for loans. Under the huge demands for the Convenient and low asset-backed loans, many small and medium enterprises and entrepreneurs have turned to private sources of funding. With the demand from the market and the government is trying to incorporate them into supervision, the government gradual relaxation of policies about the micro-loan.
Definition according to the pilot program from People’s Bank of China, the loan amount in a single lending institution registered capital of 5% is called "micro loans"。According to "micro-loan company pilot guidance"，Existing domestic policies on the small loan company is defined as “Invested by natural persons, legal persons and other social organizations, enterprises, Do not absorb public deposits, Limited liability company or Co., Ltd company which run micro-loan business.”
Industry analysis
The Porter's
Program: Financial Services
Introduction:
This report is focus on the micro-loan industry in china. In this report, the subject will be divided into two parts: The first part will use Porter's five forces model, trying to research and analysis the industry status quo. The second part will base on a specific micro-loan company and trying to find out the development and the corresponding strategies of china’s micro-loan company.
Background
“Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.”
Gabriel Montes-Rojas (2009). The Economics of Micro-Finance, CITY UNIVERSITY LONDON.
Be different from the international definition, the definition for micro-loan in china is more like a combine with the Micro-loan and SME finance. As the large state-owned banks prefer to lend to large state-owned enterprises, also the cumbersome approval process and asset-backed lending requirements, the SME also exists great difficult for loans. Under the huge demands for the Convenient and low asset-backed loans, many small and medium enterprises and entrepreneurs have turned to private sources of funding. With the demand from the market and the government is trying to incorporate them into supervision, the government gradual relaxation of policies about the micro-loan.
Definition according to the pilot program from People’s Bank of China, the loan amount in a single lending institution registered capital of 5% is called "micro loans"。According to "micro-loan company pilot guidance"，Existing domestic policies on the small loan company is defined as “Invested by natural persons, legal persons and other social organizations, enterprises, Do not absorb public deposits, Limited liability company or Co., Ltd company which run micro-loan business.”
Industry analysis
The Porter's