Abstract

This paper examined the sustainability of nongovernmental organisation (NGO)-type microfinance service providers (MSPs) in Shaanxi province, China in comparison with Grameen Bank (GB), Bangladesh. Despite geographical restrictions, the selected MSPs successfully expanded their services to isolated mountainous regions where formal financial institutions were not in existence earlier. Overall business performance of the sample institutions were found well. They built a strong financial and informational network with Plan China (country office of Plan International), China Association of Microfinance and women federation (Shaanxi province). However, the lack of funds, limited service provisions and restrictive policy environment shackles the industry from further expansion; necessitating urgent remedial steps for resolving existing barriers and allowing these institutions to participate in China's growth. The undertaking of similar research in other provinces was suggested for a better understanding of the Chinese microfinance sector.

Key words: Microfinance service providers, China, China Association of Microfinance, Grameen Bank, Bangladesh, sustainability.