The improvement of microfinance institution under inclusive finance: A case of Grameen Bank of China

Abstract

In the rapid development of modern society, microfinance companies are an inevitable product of the economic market demand, and microfinance companies are bound by the relevant laws of China and enjoy the policy support of the state. As an effective supplement to traditional banking financial institutions, microfinance companies, with their flexible mechanisms and efficient services, are increasingly becoming an important force in achieving the goal of financial inclusion. However, due to the lack of supervision, shortage of capital, and excessive risks, microfinance companies have also been deviating from the original purpose of inclusive financial services, such as "non-farming" and "centralization" of loans. The emergence of the Grameen Bank in the 19th century - a "bank for the poor" - broke the original concept. It will be the case study for analysis in this paper. Using the case of Grameen Bank, this paper aims to explore the characteristics and advantages of small lending institutions, analyze whether they are replicable, sustainable and the social significance their existence brings, and make recommendations and prospects for promoting a greater role of microfinance companies in financial inclusion.