Vidhi Tambiah, CEO of Swiss nonprofit World Microfinance Forum Geneva, has been cited as saying that if Chinese finance officials were to improve the supply of information available to foreign investors, Chinese microfinance institutions (MFIs) could benefit from international funding [1]. Although investment channels are opening, there are still a number of requirements that make it difficult for foreign investors to take positions in the Chinese microfinance sector, including restrictions on size, funding formats and capital adequacy ratios [2,3].
In an article that appeared in Global Times, a Chinese newspaper, Tang Ning, CEO of CreditEase Business Consulting (Beijing), stated that “the current supply can’t satisfy demand in China” for financial services for low-income individuals [1].
For 2010, the People’s Bank of China, the nation’s central banking authority, reported that approximately 2,600 MFIs in the country have an aggregate outstanding loan balance of RMB 198 billion (USD 30.4 billion) [4].
By Rohan Trivedi, Research Associate
Sources and Additional Resources:
[1] Global Times: “Foreign microfinance firms request roadmap”, http://business.globaltimes.cn/china-economy/2011-04/649948.html
[2] Asian Philanthropy Forum: “Why is the Microfinance Industry in China So Far Behind?”, http://www.asianphilanthropyforum.org/2010/01/why-is-the-microfinance-industry-in-china-so-far-behind.html
[3] Planet Finance: “PlaNet Finance China Newsletter, Volume 2, Issue 1, Winter/Spring 2010”, PFC_ENG_Newsletter_Winter_Spring_2010.pdf
[4] MicroCapital.org story, April 26, 2011, “MICROCAPITAL BRIEF: People’s Bank of China (PBoC) Publishes 2010 Statistics on Microfinance”, https://www.microcapital.org/microcapital-brief-people’s-bank-of-china-pboc-publishes-2010-statistics-on-microfinance/
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