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China’s micro-credit comes from poverty alleviation. Nearly the development of twenty years, it’s not only something about poverty alleviation, but also works for the national economic construction, especially in rural area. Meanwhile, the risk exposure of this industry must draw enough attention.The micro-credit is classified into two types, the institutional and the welfare kind. The theory basement of the emergency and development of micro-credit includes the financial repression theory, financial deepening theory, incomplete competition theory, transaction cost theory, and institution variance theory. The poor people in rural area have great demand for finance, but, for the reason of cost, financial institutions have reduced their branches in rural area, so there is great imbalance in demand and supply. Besides, for the shortage of poverty alleviation, micro-credit comes out in our country. With the development of micro-credit, it has turned into an industry instead of a tool of poverty alleviation, meanwhile, the risk of micro-credit come into being.The risk factors of micro-credit in our country are related to its original. Its main customers is famers, those do the farm work, the high risk of agriculture produce some risk for micro-credit. By law, micro-credit institutions in our country can only lend money to customers, but they have no right to accept deposit, so it has the risk in money income. The production of micro-credit institutions is only about loan, it can only make profit from interest. A great deal of the customers of micro-credit institutions have difficult in getting loan from normal financial institutions, part of them are because of bad credit record, part of them undertake the industries those are forbidden by law, so these customers have high risk. What’s more, micro-credit is a new industry in our country, it’s short of reserve of talents, and it’s lag in technology. All these factors cause risk in micro-credit in our country. Learning from the widely used pressure test methods in commercial banks, the article tries to use this method in micro-credit industry, to analysis the risk of this industry. At the end of the article, some policy and suggestions are raised directed towards these risks.
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