Business Case Studies, Investment and Banking Case Study, Microfinance: Opportunities in China

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Investment and Banking Case Study

Case Title:

Microfinance: Opportunities in China

Publication Year : 2006

Authors: Rajan Shah & Joel Sarosh Thadamalla

Industry: Banking, Insurance and Financial Services

Region:China

Case Code: INB0001A

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
Microfinance sector in China was regarded as high quantity of low quality programmes and low quantity of high quality programmes. The lack of clear legal framework regarding involvement of commercial financial institutions led to sluggish growth of Microfinance sector in China. But the situation is likely to change with the financial reforms undertaken by the Chinese government.

The case deals with PlaNet Finance, an international Non-Governmental Organization which supported financial intermediaries like banks, cooperatives and microfinance institutions. PlaNet Finance provided technical support services, rating and financing services to various clients of Microfinance globally.

The case discusses strategic tie up opportunities between City Commercial Banks (CCBs), which had an extensive reach in rural China, and PlaNet Finance. But PlaNet Finance is faced with stiff competition from Rural Credit Cooperatives (RCCs) and Postal Saving System in China. RCCs were only formal rural financial institutions which offered financial services to rural people.

Should PlaNet Finance pursue strategic alliance route to provide Microfinance products and services to underprivileged people of China? What would be the most viable approach to address the other constrains to build partnerships?

Pedagogical Objectives:

  • To understand government policy change and its impact/ PESTEL analysis
  • To understand Rural Development and the role of Microfinance
  • To understand the nature of NGO’s work environment.

Keywords : Microfinance in China, International Non-governmental Organisations (NGOs), PlaNet Finance in China, Strategic Alliances, Investment & Banking Case Study, The People’s Bank of China, City Commercial Banks (CCBs), Rural Credit Cooperatives(RCCs), Postal Saving System in China, Poverty Alleviation in China, Government Sponsored Microfinance Programmes, China foundation for Poverty Alleviation, Agriculture Bank of China, State Reforms in China, China Banking Regulation Commission, China Development Bank, Non Performing loans in CCBs, PlaNet Rating Services, PlaNet Financing Services, Microfinance Indicators China, PlaNet Finance International Network, Opportunities for NGOs

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