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

To continue the story from last post ...

Although the Chinese government's own anti-poverty policy looks more and more like microfinance, and the government becomes more and more willing to work with international agencies, there are still restrictions on independent, non-government-funded MFIs today.

Two restrictions matter most
1. Non-financial institutions such as NGOs are prohibited from supplying any type of financial services to the poor. Hence, "NGO’s microfinance activities are, in theory, illegal." (as quoted from this article)
2. There is an uniform interest rate ceiling imposed by the government, making MFIs impossible to operate (e.g. reaching out to borrowers)

To be continued ...