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 …show more content…

Competition within the industry

Large state-owned joint-stock commercial banks
From large state-owned commercial banks lending the object point of view, mainly for regional and medium-sized enterprises, focusing on regional priority projects, the development of pillar industries, a larger amount of credit single, overall size is also large, as including other joint-stock commercial banks and regional banks cannot match the unique business positioning. This also makes the new micro-loan companies cannot be compared; of course, there was no direct market competition. However, micro-loan companies with a direct market competition of businesses - small and medium enterprises and even small economic organizations, credit has gradually been large state-owned joint-stock commercial banks pay attention to it, have begun to develop small and medium enterprises and even small economic organizations, credit customers, to increase their credit.
For example, the Construction Bank in 2008 that established a special SME Center, responsible for meeting all outlets accept the jurisdiction of the credit needs of small business customers; head office level in 2009 and set up a SME credit department, branch-level "SME Center" also will be upgraded to a "Ministry for SMEs," and gradually increase the business development efforts. The other three banks have begun to compete for the credit market for SMEs.