Microfinance performance in China´s rural areas: A perspective of regional differences

Based on the micro-panel data of 116 farmer households in 28 Chinese provinces from 2001 to 2007, the paper conducts an empirical analysis of the microfinance performance in different regions. The results show that rural microfinance exerts a significant effect on raising farmers´ income. However, due to regional differences, the performance varies a lot. The key factors that affect the performance, such as the loan amounts, educational levels, loan terms and gender, are discussed. The paper concludes that a new microfinance mechanism targeting regional characteristics can help microfinance play a more crucial role in its contribution to the improvement of the income level of local farmers.