Rationale for Investment in Inclusive Finance in China

The guidelines for China’s new microfinance business models include a possibility for both local and foreign private investments.

For private investors, investing in these business models has pros and cons. For the government, bringing in private investors into these business models also has advantages as well as disadvantages.

The World Microfinance Forum Geneva (WMFG) believes that the government and investors, both foreign and local, have a common interest in ensuring that the advantages of private investment prevail. It is in everyone’s interest that investors contribute positively to the development of a more market-oriented economy and act responsibly when it comes to establishing and operating institutions targeted at making the system more inclusive. It is also in everyone’s interest for the government to support positive investor behaviour.

Open and regular fact-based communication between the government and investors is an effective way to achieve positive investor behaviour and supportive government policies. For this reason, WMFG has created a Working Group on Investment in Inclusive Finance in China.