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« Wokai's China Microfinance Series: Development of China Microfinance | Main | Wokai's China Microfinance Series: Chinese Government to Legalize Private Lending & Other Recent Developments »

March 27, 2009


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Prashan P

Some comments:

1. The China Foundation for Poverty Alleviation (CFPA) deserves a mention in your NGO section, considering it's the largest NGO-based MF program in China with some 30,000 active clients.

2. In relation to MCCs, it is not the fact that the MCC cannot take deposits that's a restriction to growth (there are plenty of non-deposit taking lending institutions in the world). It's the restrictions that are placed on how much you can leverage your equity.

3. In relation to Village/Township Banks (VTBs), how does having a minimum capital threshold limit their ability to grow? Also, how does requiring an established bank to be the major shareholder in the VTB hinder their growth? Surely the VTB would benefit from the bank's experience. The real hinderance is that most MF networks are blocked out of being shareholders due to China's qualified foreign investor requirements (>US$1b in assets, for investment in VTBs). HSBC, Standard Chartered and the IFC have all invested into VTBs in China. There were 100-odd at the end of 2008 and this is set to rise dramatically.

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