Chinese Microfinance Networks and Cooperation Patterns

This paper focuses on meso-level issues of the microfinance industry in China. It identifies different kinds of networks and cooperation patterns currently in practice in the sector. These include:

• Industry level networks such as China Association of Microfinance;
• Networks of NGO MFIs, such as Funding the Poor Cooperative of China Academy of Social Sciences, China International Center for Economic & Technical Exchanges/UNDP Microfinance Program, and Microfinance Project of China Foundation for Poverty Alleviation;
• Networks of commercial banks and companies, such as China Development Bank and its microfinance projects, Peoples Bank of China microcredit company pilot.

The paper explores the transition of the cooperation patterns, from traditional projects that were donor or government-led to commercial undertakings or investor-led patterns, and states that the existing cooperation patterns separate the microfinance sector from the overall financial system. They also constrain microfinance outreach and sustainability in China.Finally, the paper suggests new cooperation patterns for the development of an inclusive microfinance sector in China that would broaden cooperation patterns and share the advantages among all stakeholders. This would help integrate microfinance operations into the overall financial system.