Under the cooperation of UNDP, CICETE and the Monetary Policy Department of PBC, a research project on Microfinance Policy has been designed by the three parties and financed by UNDP, for the purpose of getting a general understanding of the actuality of Microfinance in China, ascertaining its future development orientation, and stipulating pertinent policies. The main role of this project is to research Microfinance's actuality of all types of microfinance business and projects of both domestic and overseas institutions, collect successful experience of microfinance institutions in the world, and make comparison of its development between China and western countries. Based on the above work, the project will finally summarize the actuality of the Microfinance, analyze its prospective development orientation, and put forward suggestions of policies and laws according to the situation of China.

An expert workshop on Microfinance was held in Beijing organized by the Monetary Policy Department of PBC, on 10th Dec. Officials, experts and staff participated in the workshop, separately from Monetary Policy Department and regional central branches of PBC, CICETE, Chinese Academy of Social Science, Shanghai University of Finance and Economics, and Southwestern University of Finance and Economics.

Mr. Dai Genyou, the Director General of the Monetary Policy Department of PBC, gave an important speak on the meeting, stressing the significance of the project. He pointed that we are still facing arduous challenges such as the discrepancy between the West and the East China, the poverty of countryside and urban laid-off, while the development objective of our party and country in the new century is to build a well-off society in an all-round way. Due to the fund deficiency, financial service to disadvantageous groups tends to be ignored. Years of experiments and explorations led to the rapid development of Microfinance in China and we've also got experience consistent with the reality of the country, thus a situation, which developed in diversified institutions and modes simultaneously, was formed initiatorily. Expanding from country to town, Microfinance took great part in developing the independence capacity of the poverty population and helping them casting off poverty and setting out on a road to prosperity, thus ensure the successful implement of the poverty alleviation.

However, along with the experiment and popularization of Microfinance, its scale enlarged and more institutions participated in it; therefore, some problems emerged from the non-financial institutions and many of which become prominent, mainly comprising the standardization and management integrality of credit products. To solve these problems as soon as possible will be propitious to the healthy development of Microfinance, maintenance of the financial system, amelioration of the financial service to the poor and low income population, ensuring that the poverty alleviation go on wheels. Meanwhile, some experience derived from non-financial institutions, which was mainly on credit management and risk control, is worthy of learning and using for reference by financial institution. The healthy development of Microfinance in China is not only of great historical and practical significance, but also a long-term arduous task requiring cooperation among all parties.

The target, research object, contents and research measure of the Microfinance Project had been discussed actively during the meeting. Leaders and officials from regional central branches of PBC showed their great support and put forward valuable advices. A preparatory project scheme was established in the meeting. In the end, Mr. Jiang WeiJun, Vice Director General of the Monetary Policy Department of PBC, strongly required an overall and in-depth investigation of the Microfinance Project to provide scientific foundation for government decision-making.

The project will last one year. At the year-end of 2003, a report will be finalized and an international conference is also going to be held for further discussion, after large quantities of research work.

Considering the complexity and arduousness of the project, the budget of UNDP assistance is insufficient and more financial assistance is welcome from other international organizations. Moreover, experience and achievements of Microfinance institutions, domestic and overseas, will facilitate the research.