An Analysis on the Low Default Rate in Microfinance--a Case Study of a Microfinance Program in an Inland City of China

摘要

Microfinance,in most developing countries,achieves a low default rate on loans to the poverty group that are considered as high risk clients by conventional financial institutions. This paper adopts both comparative and classification analysis methods for an in-depth research on the clients as well as the lending mechanism that the microfinance institution in this study has been using. The results of these analyses validate some of the existing explanations of how the microfinance institutions (MFIs) succeed in achieving low default rates. Factors that contribute to the low default rate on one hand,but might,on the other hand,deviate from the mission of microfinance are also brought to the attentions of readers.