Essay on Report About China’s Micro-Loan Industry

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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
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Therefore, the micro-loan companies must see this comes from the alternative competition. From the current China's trust, venture capital institutions and even China's private investment company point of view, have been largely for the "loan" business class on the industry caused a threat, this "threat of substitutes" has been very clear.

5. Competition with industry rivals
Small loan companies are facing "the degree of competition with industry rivals" is a most important competitive factor. This is because we can see from the above analysis, this article will be "from banks, small loan companies, etc. to obtain the loan," as a kind of unity and means of financing, which means you can operate lending institutions are "the competitors', while the number of competitors within the industry and size are very large.

Micro-loan Company with its "small scattered, only credit does not exist" and its own characteristics, determine its true sense does not belong to absorb public deposits and eventually serve all the public "financial institutions". In a sense, role of small loan companies should be derived from the "rectification underground financing, bringing together private capital" of the mind, which can then gradually to the community of public financial institutions - commercial banks to change the target. Therefore, the properties from the industry point of view, the current micro-loan

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