China Was Slow to Embrace Microfinance, But the Government's Attitude is Changing

China has been slow to embrace microfinance. According to Casey Willson in this video, China's microfinance portfolio is only $200 million, whereas Bangeladash, with a population 1/10 of that of China, has a portfolio of $500 million.

There are many reasons why this is case. In short, China has a super tight control of the banking industry and the credit market in general. While banking industry has always been considered a "strategic industry" by the government (see 薄一波's memoir, in which he recounted how the communists were almost out-maneuvered by Shanghai bankers after they took control of the city), the Asian financial crisis of 1997-98 further stunned the Chinese leaders into uncontrolled-capital-flow skeptics.

For a brief historical review of the Chinese government anti-poverty efforts, you can read this article. In short, the changes were:
1. from direct subsidy to targetted loans and credits
2. from central redistribution only to international cooperation

Keywords: 八七扶贫攻坚计划, 小额扶贫, 杜小山, 扶贫经济合作社

To be continued ...