Definition of Microfinance
With the expansion of the microfinance system, the concept of microfinance is also expanding. Now its most accurate definition is: small-scale, sustainable financial products and services provided specifically to small and micro enterprises and low-and middle-income classes.
Characteristics of Microfinance
First, small and micro enterprises targeting specific customers and poor or low-and middle-income groups; Second, due to the particularity of customers, there will be financial products and services suitable for such specific target customers.
It is worth emphasizing that such projects or institutions that provide special financial products and services to specific target customers pursue their own financial self-reliance and sustainable development goals. In other words, microfinance institutions should be commercially sustainable. Only in this way can they become an indispensable and increasingly important part of the whole financial system.
Forms of Microfinance Institutions in China
In 20 12 years, the financing demand of small and medium-sized enterprises in China is about 16.3 trillion yuan, of which 80% is lack of funds. Among them, 95% of enterprises have never obtained bank loans, and 75% of SMEs' loan needs have not been met. As a tool to help entities, finance is the significance of innovative finance. Compared with the traditional Internet financial model, the innovative Internet microfinance model allows investment users to lend their idle funds to high-quality enterprises with good entity operation and sufficient mortgage through the joint offline credit guarantee institutions. Let professional institutions do professional things, which is the core concept of P2C model. Using the Internet, information symmetry can be realized, resources can be used efficiently, investors can directly connect with demanders with financing needs, and complicated intermediate links can be reduced as much as possible, so that investors can directly enjoy the growth dividend of business development. In contrast, the information of direct investment by enterprises is more transparent, and the income of investors has been significantly improved compared with other investment methods.
1. Institutions with the nature of public welfare and poverty alleviation. Typical examples are the Institute of Agricultural Development of China Academy of Social Sciences, the Foundation for Poverty Alleviation and non-governmental organizations. Although these institutions are not for profit, they also operate in the form of market-oriented credit technology.
2. Semi-commercial and semi-public welfare institutions represented by development financial institutions;
Commercial institutions, including rural credit cooperatives, rural banks, small loan companies, city commercial banks, rural commercial banks, etc. ;
Fourth, other innovative financial institutions, such as the emerging p2p financial information service platform and P2C Internet microfinance platform.
In 20 12 years, the financing demand of small and medium-sized enterprises in China is about 16.3 trillion yuan, of which 80% is lack of funds. Among them, 95% of enterprises have never obtained bank loans, and 75% of SMEs' loan needs have not been met. As a tool to help entities, finance is the significance of innovative finance. Ai Investment's innovative micro-finance model through the Internet is widely combined with offline credit guarantee institutions, allowing investment users to lend their idle funds to high-quality enterprises with good entity operation, sufficient mortgage and loan demand through Ai Investment Platform. Let professional institutions do professional things, which is the core concept of P2C model. The essence of loving investment is to rely on the financial intermediary of the Internet with high communication coverage. Through this light professional information platform, the funds will be diverted to the places where the society really needs them, so as to achieve a high degree of unity of capital value and social value and let investors share the growth dividend of the enterprise. [2]p
Reasons for the Development of Microfinance
First, the demand for funds by small and medium-sized enterprises, entrepreneurs and individual industrial and commercial households has increased sharply.
At present, the private economy represented by small and medium-sized enterprises and small and micro enterprises has occupied half of the national economy. The financing difficulty of small and micro enterprises is a major factor restricting the vitality of this micro-circulation system. The development of micro-credit can meet the financing needs of these enterprises and promote economic development.
Second, the desire of social capital to participate in investment extensively and urgently.
With the development of economy, the number of middle class is increasing, and they have a strong desire to invest. The development of microfinance provides these people with broader investment channels, which can effectively use idle funds in society and create income for fund holders.
Third, the internet financial model provides the possibility for microfinance innovation. The development of information technology and Internet has promoted the innovation of financial business and products, thus changing the financial business model. P2P, P2C and other financial models have become typical ways of microfinance.